Translation
This is an English language translation of the original Japanese announcement on our Website released on February 25, 2015.
However, no assurance or warranties are given with respect to the accuracy or completeness of this English language translation.
The Japanese original shall prevail in the case of any discrepancies between this translation and the Japanese original.

Summary of Financial Results (REIT) for the Fiscal Period Ended
December 31, 2014
February 25, 2015
Name of Issuer:

Invincible Investment Corporation

Stock Exchange Listing:Tokyo Stock Exchange

Securities Code:

8963

URL

Representative:
Name of Asset Manager:
Representative:
Contact:

Naoki Fukuda, Executive Director
Consonant Investment Management Co., Ltd.
Naoki Fukuda, President & CEO
Akiko Watanabe, Manager, Planning Department

Scheduled Date of Filing of
Securities Report:

March 27, 2015

Supplementary Materials for
Financial Results:

Yes

Presentation Meeting:

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

TEL. +81-3-5411-2747

Scheduled Date ofCommencement for Distribution
March 27, 2015
Payments:

Yes (for analysts and investors)

1.

(values are rounded down to the nearest million yen)
Financial Results for the Fiscal Period ended December 31, 2014 (from July 1, 2014 to December 31, 2014)(1)

Operating Results

Fiscal period ended
December 31, 2014
Fiscal period ended
June 30, 2014

Operating Revenues(Percentages indicate percentage change from the preceding period)
Operating Income
Ordinary Income
Net Income

Millions of yen%

Millions of yen

Millions of yen%

Millions of yen

%

4,610

22.1

2,769

24.0

1,958

117.0

1,958

117.1

3,775

37.8

2,234

76.5

902

155.4

901

155.6

Net Income per Unit%

Ordinary Income/
TotalAssets

Net Income/Unitholders’ Equity

Ordinary Income/OperatingRevenues

Fiscal period ended
December 31, 2014

yen

%

%

%

762

4.0

1.9

42.5

Fiscal period ended
June 30, 2014

573

2.5

1.1

23.9

(Note)(2)“Net Income per Unit” is calculated based on the average number of investment units during the period and is rounded to the nearest yen.
Net income per unit calculated based on the number of investment units issued and outstanding at the end of the fiscal period ended
December 31, 2014 and rounded down to yen. is JPY 733.

Distributions
Distribution perDistribution
Unit (Excluding
AmountExcess Profit
excess profit(Excluding
Distribution per
distribution per
excess profit
Unit
unit)
distribution per
unit)

Excess Profit
Distribution
AmountDividend Payout
Ratio

Distribution/
Net AssetsyenMillions of yen

yen

Millions of yen%%

Fiscal period ended
December 31, 2014

733

1,956

0

0

99.9

3.2

Fiscal period ended
June 30, 2014

573

901

0

0

100.0

2.5

(Note)(3)

Dividend payout ratio is calculated by dividing “Distribution Amount” by “Net Income”.

Financial Position
Total Assets

Fiscal period ended
December 31, 2014
Fiscal period ended June30, 2014

Net Assets

Net Assets/Total Assets

Net Assets per Unit

Millions of yen

Millions of yen%

yen

130,477

61,39247.1

23,00579,26136,37345.9

23,121(Note)“Net Assets per Unit” is calculated based on the number of investment units issued and outstanding at the end of each period, and is rounded
to the nearest yen.

(4)

Cash Flows
Cash Flows fromOperating Activities

Fiscal period ended
December 31, 2014
Fiscal period ended
June 30, 2014

Cash Flows from
Investment Activities

Cash Flows from
Financing Activities

Closing Balance of Cashand Cash Equivalents

Millions of yen

Millions of yen

Millions of yen

Millions of yen

1,209(40,119)

48,551

13,165

6,622(5,802)(1,482)

3,524

2

2.
Forecast for the Fiscal Period ending June 30, 2015 (from January 1, 2015 to June 30, 2015) and the Fiscal Period ending
December 31, 2015 (from July 1, 2015 to December 31, 2015)(Percentages in brackets represent change from preceding period)
Distribution per
Unit (excluding Excess Profit
Operating Income Ordinary Income
Net Income
excess profit Distribution per
Unit
distribution perunit)

Operating
Revenues
Millionsof yen%Millionsof yen%Millionsof yen%Millionsof yen

%

yen

yen

Fiscal Period
endingJune 30, 2015

4,631

0.4

2,439

(11.9)

1,903

(2.8)

1,902

(2.8)

712

0

Fiscal Period
endingDecember 31,
2015

5,034

8.7

2,812

15.3

20.6

859

0

2,294

20.6

2,293

(Reference)
Estimated net income per unit for the fiscal period ending June 30, 2015 is JPY 712 and Estimated net income per unit for the fiscal
period ending December 31, 2015 is JPY 859.

3.

Others(1)
Changes in Accounting Policies, Accounting Estimates or Restatements(a) Changes in Accounting Policies due to Revisions to
Accounting Standards and Other Regulations
None(b) Changes in Accounting Policies due to Other Reasons
None(c) Changes in Accounting Estimates
None(d) Restatements
None(2)
Number of Investment Units Issued and Outstanding(a) Number of Units Issued and Outstanding as of the
End of the Fiscal Period (Including Treasury Units)

December 31, 2014(b) Number of Treasury Units as of the End of Fiscal Period

December 31, 2014

2,668,686 June 30, 2014
0June 30, 2014

1,573,179
0.

ͤThe Implementation Status of Statutory Audit
At the time of this financial report, the audit procedures for the financial statements pursuant to the Financial Instruments
and Exchange Act are yet to be completed.
ͤExplanation on the Appropriate Use of the Forecast of Results and Other Matters of Special Consideration(Explanation on the Appropriate Use of the Forecast of Results)
The forward-looking statements in this financial report are based on the information currently available to us and certain
assumptions which we believe are reasonable. Actual operating performance may differ significantly due to factors wecannot predict as of this date, including gains or losses from the disposition of properties, repayment of borrowings,
decreases in rents and changes in operating conditions. Further, there is no guarantee of the payment of the forecast
distribution amount.
Please refer to “Assumptions for the Forecasts for the Fiscal Period ending June 30, 2015 (from January 1, 2015 toJune 30, 2015) and the Fiscal Period ending December 31, 2015 (from July 1, 2015 to December 31, 2015)”,
on page 14 for assumptions used in the forecasts and precautions regarding the use of such forecasts.

3

1. Related Companies of the Investment Corporation
Disclosure is omitted because there have been no material changes in the “Structure of the Investment
Corporation” section of the latest securities report (filed on September 26, 2014).

2. Management Policy and Operating Conditions(1)

Management Policy
Disclosure o f “Investment Policies” and the “Investment Targets” is omitted because there have been nomaterial changes from the relevant sections of the latest securities report (filed on September 26, 2014)
Further, INV decided to partially amend its Articles of Incorporation at the general unitholders’ meeting held on
November 28, 2014 and changed its “Distribution Policy”.

In accordance with this, Consonant Investment

Management Co., Ltd., the asset manager to which INV entrusts the management of its assets (the “Asset Manager”),
decided to partially change the Distribution Policy in its Investment Guidelines.
(2)

Operating Conditionsa

Overview of the Reporting Period(a)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; hereinafter referred to as the “Investment Trust Act”). In May 2004, INV waslisted on the Osaka Securities Exchange (application for delisting was made in August 2007), and in August 2006
was listed on the Real Estate Investment and Trust Securities Section of the Tokyo Stock Exchange (Ticker Code:8963).
In addition, a merger with LCP Investment Corporation (“LCP”) was implemented on February 1, 2010.
Ever since the commencement of sponsorship from Calliope Godo Kaisha (“Calliope”), an affiliate of Fortress
Investment Group LLC (“FIG” and together with Calliope and other affiliates of FIG, the “Fortress Group”) in July
2011, INV has been focused on the improvement of its properties’ occupancy rates, the reduction of expenditures andstrengthening its asset management capabilities. Furthermore, in September 2012, INV newly acquired 24 residential
properties without issuing new equity thereby improving earnings and distributions per unit through external growth.
Moreover, in December 2013, INV refinanced existing bank borrowings with new borrowings arranged by
Sumitomo Mitsui Banking Corporation (“SMBC”) and The Bank of Tokyo-Mitsubishi UFJ, Ltd. (“BTMU”) together
with funds raised via third-party allotment mainly to the Fortress Group. This marked the first lending to INV fromJapanese mega-banks since the new sponsorship and strengthened its lender formation, established a strong financialbase for future growth and significantly reduced interest expenses.
In May 2014 (during the fiscal period ended June 30, 2014 (previous fiscal period)) and in July 2014 (during the
fiscal period ended December 31, 2014 (reporting period)), INV implemented the following series of transactions (the“Transactions”) to reposition the portfolio in order to focus on an asset class with expanding market share in thehospitality market that complements the existing portfolio characterized by stable earnings.

4

<Outline of the Transactions>
Overview

Date

May 2014

June 2014

Acquisition

and

sale

of

properties
Revision of the Investment
Guidelines
Asset acquisition funded by

July 2014

Global Public Offering of
new units

Acquisition of 2 limited service hotels and sale of 7 senior
housing properties via new lending.

Added hotel assets to ‘core asset’ type.

Acquisition of 18 limited service hotels by the funds procured
through the global offering and new loan.

Due to the asset expansion and the strong performance of the relevant 20 hotels, net income per unit increased
substantially leading to an annual DPU for the period ended December 2014 of JPY 1,306, which increased from JPY
1,150 previously forecast on June 23, 2014. The total market value as of January 30, 2015 reached JPY 140,372 million,
helping INV achieve its mid-term market capitalization target of JPY 100 billion (announced in February 2014) in lessthan a year.
As demonstrated by the strong income growth from its existing 20 hotel portfolio and market trends, INV acquired
additional hotel properties taking into consideration the revenue potential of the properties. On February 6, 2015, INV
acquired one hotel from a third-party and two from the Sponsor’s pipeline MOU. The asset acquisition was completedusing cash-on-hand and new loans, without issuing new equity(Note). As a result of the February 2015 acquisition, INV
expects the annual net income per unit and DPU for 2015 to increase to JPY 1,571 compared to the previous forecast of
JPY 1,422 announced on October 31, 2014.
INV continues to pro-actively manage the portfolio by acquiring assets that produce stable income and provide
upside potential, while reducing costs such as interest-bearing debt expenses. The series of deliberate steps were
implemented since the Sponsorship of the Fortress Group in order to increase unitholders’ value.

(Note) Please refer to “c Significant subsequent events” below regarding the acquisition of the 3 hotels on February 6,
2015.
(b)

Operational Environment and Performance
During the reporting period, although consumer spending slowed due to the consumption tax increase in April

2014, the Japanese economy showed continuous improvement on the back of strong corporate performance centered onlarge manufacturers. In December 2014, the unemployment rate dropped to 3.4% and the jobs-to-applicants ratio
increased to 1.15 (the highest ratio in over 22 years and 9 months). In and after the fiscal period ending June 30, 2015,
the economic upswing is expected to continue due to (i) the postponement of an additional increase in the consumption
tax, (ii) the recovery in consumer spending on the back of the improved employment and salary environment, (iii) the
impact of government’s financial policy and the Bank of Japan’s large scale monetary easing policy and (iv) the
increase in corporate 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 Tokyo and otherlarge cities as a result of Japan’s economic recovery and expectations of reflation. According to the Japanese Real
Estate Investor Survey (October 2014) conducted by the Japan Real Estate Institute, investors expect capitalization rates
for offices, residences, retail facilities and hotels to decline. Investment demand is still high such that investors who

5responded that they will make new investments over the next year rose by 2 points to 94% from the previous survey(April 2014).
Regarding the property rental market, the Tokyo office building vacancy rates continue to decline while rates
are bottoming out in parts of other major cities. Large corporations are consolidating their floor space as well
as expanding leasing space in the same buildings. Rents increased mainly for newly constructed buildings andpremium properties.
With respect to the residential sector, market rent trends for small-type city-center properties are improving
and the Asset Manager increased the rent from the previous fiscal period after a careful unit-by-unit analysis of
the residential assets. As a result, INV realized a rent increase for 62.3% (versus 53.3% in the previous period)of the new residential lease agreements or a total rent increase of 2.1% compared to the previous rent (versus a
1.8% increase in the previous period). As part of the rent increase program, INV achieved a rent increase for51.9% of contract renewals (versus 24.9% in the previous period); and a 1.8% increase compared to theprevious rent (versus a 0.8% increase in the previous period). Net leasing costs (advertising expenses + freerent – key money), were reduced to an average of 1.18 months per new lease agreement, or a reduction of 0.33
months year-on-year, and a 0.02 month reduction compared to the budget.
The hotel sector has consistently performed well in large part due to the Japanese government’s proactive
stance to promote tourism initiatives such as airport capacity expansion, the entry of LCC’s into the Japanesemarket, and the relaxation of visa requirements for some Asian countries. The number of international visitors toJapan from China and Southeast Asian countries such as Indonesia, the Philippines and Vietnam has increased
significantly, helping Japan log a record high 13.4 million visitors in 2014, providing firm demand foraccommodations.

In addition to the above-mentioned favorable external factors and intensive revenue

management actions from the hotel operators, INV’s 20 hotel properties recorded strong performance led by anincrease in sales to overseas guests whose share of total sales increased by 18.2 points, a 2.3 point increase in theoccupancy rate (Note 2), a 14.9% increase in ADR (Note 3), and a 17.9% increase in RevPAR (Note 4), comparedwith the same period in the previous year.
As a result, INV’s average occupancy rate across the entire portfolio increased to 96.1%, and NOI increased by
91.3% over the previous fiscal period to JPY 3,861 million.

At the end of the reporting period, the number of properties held by INV totaled 91, including 63 residential
properties, 20 hotels, 7 office buildings and retail facilities as well as one parking lot at a total acquisition price of
JPY 117,917 million and total leasable area of 224,574.36 m2.
As a result of the above trends in real estate investment and the rental market, as well as the strong performance ofthe hotel properties, the total appraisal value was JPY 126,558 million, an increase of JPY 8,948 million (+7.6%)(Note 5). In particular, the appraisal value of the 20 hotel properties recorded a substantial increase of JPY 6,927
million (+15.1%) (Note 5) helping to enhance the portfolio asset value.
(Note 1) The performance of the same period in the previous year (from July 2013 to December 2013) is based on data
provided by the seller of the 20 hotels before INV acquired the 20 hotels. Likewise, the performance of the period
from July 1, 2014 to July 16, 2014 of the 18 hotels INV acquired on July 17, 2014 is based on data provided by theseller of those hotels.
(Note2) “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)

6

(Note 3) “ADR” means average daily rate, and is calculated by dividing total room sales (except for service fee) for a certain
period by the aggregate number of days per room for which each room was occupied during the same period.
(Note 4)“RevPar” means revenue per available room per day, and is calculated by dividing total room sales for a certain
period by total number of rooms available (number of rooms x number of days) during the same period, and is thesame as the figure obtained by multiplying occupancy rates by ADR.
(Note 5) For the 18 out of the 20 hotels, which were acquired as of July 17, 2014, the comparison was made with theappraisal value as of April 30, 2014. For the other two properties, the comparison was made with the value as ofthe previous fiscal period.
(c)Overview of Fund Raising
INV raised JPY 23,961 million through a Global Public Offering and third-party allotment in order to procure

funds for the acquisition of 18 hotels (Global public offering, 1,040,000 new units in July 2014, paid-in JPY 22,747
million; third-party allotment, 55,507 new units in August 2014, paid-in JPY 1,214 million). INV simultaneously
obtained New Syndicate Loan (C) in the amount of JPY 57,300 million in order to refinance the existing borrowings
New Syndicate Loan (A) and New Syndicate Loan (B) through a syndicate arranged by SMBC, BTMU, and Mizuho
Bank on July 17, 2014, which lowered interest-bearing debt costs to 1.09% (as of July 31, 2014) from 1.48% (as of June30, 2014).
As a result of the above measures, the outstanding balance of interest-bearing debt for INV was JPY 67,260 million,
and the Loan-to-Value ratio was 51.5 % (Note) as of the end of December 2014.
(Note) The calculation for the Loan-to-Value ratio uses the calculation formula below:
Loan-to-Value ratio = amount of interest-bearing debt ÷ total amount of assets at end of period x 100(d)

Overview of Results of Operations and Distributions
Operating revenues for the reporting period increased by JPY 835 million from the previous period (+22.1%) to

JPY 4,610 million, and net income for the reporting period increased by JPY 1,057 million from the previous period(+117.3%) to JPY 1,958 million.
Distribution per unit for the period ending December 2014 was JPY 733, an increase of JPY 133 (+22.2%)
above the original forecast of JPY 600 as announced in the Summary of Financial Results on August 27, 2014. INV will
distribute the entire amount of net income (excluding fractions less than one JPY per unit), without a reversal of thesurplus utilizing negative goodwill from the Merger in February 2010.
b

Outlook for the Fiscal Period Ending June 30, 2015(a)

Future operational policy and issues to be addressed(i)External growth strategy
New Property Acquisitions
INV believes the strengthening of the financial base through reduction ofborrowing costs, a significant

improvement in the debt service coverage ratio, and further strengthening of the lender formation enhances both debt
and equity fund raising capacity, thus greatly improving the external growth capability.

Although the acquisition of properties in the housing and the hotel sectors, which comprise INV’s core assets, is7highly competitive, Fortress Group, INV’s sponsor, has established a strong track record of large-scale real estate
investments in Japan providing a substantial pipeline of assets for INV. INV entered into a memorandum of
understanding on June 23, 2014, giving INV preferential negotiating rights (Note 2) in respect to the acquisition of 22
limited service hotels (as described below) out of the pipeline assets held by the Fortress Group, in order to ensure
further future growth.
By utilizing such pipeline support from the sponsor and the property sale information from the Asset Manager’s
independent network, INV plans to continue acquiring properties that contribute to stable profit and cash flow growthleading to an increase in the distribution per unit.
As described in “c Significant subsequent events” below, on February 6, 2015, INV acquired 3 hotels, of which 2
hotels, “Hotel Nets Hakodate” and “Flexstay Inn Shirogane” were properties listed in the memorandum of understanding.

Hotel Mystays Akasaka (Note 1)

2-17-54 Akasaka, Minato-ku, Tokyo

Number of
Guest
Rooms
319

Hotel Mystays Kameido P1

6-32-1 Kameido, Koto-ku, Tokyo

265

Hotel Mystays Kanazawa

2-13-5 Hirooka, Kanazawa, Ishikawa

244

Hotel Mystays Kameido P2

6-7-8 Kameido, Koto-ku, Tokyo

175

Hotel Mystays Haneda
Hotel Mystays Yokohama Kannai (tentativename) (Note 1)
Hotel Mystays Utsunomiya

5-1-13 Haneda, Ota-ku, Tokyo

174

5-65 Onoecho, Naka-ku, Yokohama, Kanagawa

166

2-4-1 Higashishukugo, Utsunomiya, Tochigi

116

Hotel Mystays Ueno Iriyaguchi

5-5-13 Higashiueno, Taito-ku, Tokyo

97

Flexstay Inn Ekoda

8-6 Sakaecho, Nerima-ku, Tokyo

210

Flexstay Inn Higashi-Jujoh

8-6 Sakaecho, Nerima-ku, Tokyo

88

Flexstay Inn Shirogane
Flexstay Inn Kawasakikaizuka

5-10-15 Shirogane, Minato-ku, Tokyo
1-13-2 Kaizuka, Kawasaki-ku, Kawasaki, Kanagawa

64

Flexstay Inn Kawasakiogawacho

15-9 Ogawacho, Kawasaki-ku, Kawasaki, Kanagawa

62

Flexstay Inn Shinsaibashi

1-9-30 Nishishinsaibashi, Chuo-ku, Osaka, Osaka

54

Toko Hotel

2-6-8 Nishigotanda, Shinagawa-ku, Tokyo

338

Best Western Hotel Fino Sapporo

4-15 Kita8jo-Nishi, Kita-ku, Sapporo, Hokkaido

242

Hotel Nets Hakodate

26-17 Honcho, Hakodate, Hokkaido

202

Takamatsu Tokyu Inn

9-9 Hyogomachi, Takamatsu, Kagawa

191

Hotel Vista Shimizu

1-23 Masagocho, Shimizu-ku, Shizuoka, Shizuoka

152

Comfort Hotel Toyama Ekimae

1-3-2 Takaramachi, Toyama, Toyama

150

Best Western Hotel Fino Oita

1-32 Niagemachi, Oita, Oita

145

Super Hotel Shinbashi Karasumoriguchi

5-16-4 Shinbashi, Minato-ku, Tokyo

74

Property Name

Location

Total(2 hotels acquired out of the properties listed
above.)
20 properties left after the acquisition of 2
properties

84

3,612
(286)
3,326

(Note 1)

“Hotel Mystays Akasaka” is under reconstruction, and “Hotel Mystays Yokohama Kannai (tentative name) isunder construction.

(Note 2)

INV has preferential negotiating rights for one year after the execution date of the memorandum of
understanding (June 23, 2014) with sponsor related entities. For the 20 properties other than 2 properties
already acquired, there are no specific plans to acquire, and INV cannot guarantee that INV will acquire any

8

of these properties
Property Sales
While INV places priority on increasing unitholders’ value through external growth, taking into account theincreased level of activity in the real estate trading market, it also plans to consider the possibility of property saletaking into consideration the portfolio sector composition, geographic distribution and competitiveness of each
property, as appropriate.
(ii)

Strategy for internal growth
INV will continue to strengthen its collaborative ties with Property Management (PM) companies and brokers tofurther boost occupancy rates and earning capabilities of its properties.
With respect to INV’s residential properties, INV will focus on increasing rent for new lease contracts as well as
for lease renewals while reducing net leasing costs for new lease contracts in conjunction with the peak residential
leasing season that occurs during the June 2015 period in order to maximize profits.
With respect to the hotel properties, INV intends to increase rent revenue through detailed analysis andunderstanding of each hotel based on market trends and close communication with the hotel operators, and bycontinuous strategic initiatives to further enhance revenue management.

The implementation of appropriate

maintenance and repair plans is of the utmost importance in maintaining and enhancing the competitiveness andmarket value of the properties as well as ensuring stable operations and high tenant satisfaction. Therefore, INV willcontinue to monitor current strategic plans with flexible implementation as it sees fit.
(iii) Financial strategy
Following the strengthening of the financial base v i a the refinancing implemented during the reporting period
and the new borrowing implemented in February 2015, INV will promote a financial strategy which envisages toswitch to unsecured borrowings in the future, to obtain a credit rating and to issue investment corporate bonds.
Also, INV seeks to strengthen its earnings base by way of lengthening and diversification of borrowing terms,
further reduction of borrowing costs, adjustment of appropriate fixed/variable interest rate ratio taking into
consideration the interest rate trends, strengthening of its lender formation and improving fund raising capacity, inorder 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 Asset Manager, two
supervisory directors (an attorney and a certified public account) oversee the execution of the executive officer’s duties
via the Board of Directors of INV. In addition, the compliance officer of the Asset Manager attends each meeting of
the Board of Directors in the capacity of an observer.
The Asset Manager has a compliance officer who is responsible for compliance with laws, regulations andother relevant matters as well as overall management of transactions with sponsor related parties. Moreover, it has
in place a compliance committee which, chaired by such compliance officer, is in charge of deliberating on
compliance with laws, regulations and other relevant matters as well as transactions with sponsor related parties.
Compliance committee meetings are attended by an outside expert (an attorney) who, sitting in as a compliancecommittee member, conducts rigorous deliberations on the existence of conflicts of interest in transactions with sponsor
related parties as well as strict examinations with respect to INV’s compliance with laws and regulations.

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

Significant subsequent events
INV acquired 3 high-quality limited service hotels (total acquisition price JPY 13,261 million) with stable revenue
and growth potential, using its surplus of cash-on-hand and a new loan (JPY 6,241 million) without issuing newinvestment units in the fiscal period ending June 30, 2015 (24th fiscal period).
As a result, the total number of properties held by INV after the acquisition increased to 94 properties (of which 63
residential properties, 23 hotels properties and 8 other properties) with a total acquisition price of JPY 131,188 million(of which, JPY 58,083 million for residential properties, JPY 58,634 million for hotel properties and JPY 14,470 million
for other properties).

(a)Acquisition of Assets
INV acquired the 3 limited service hotels (trust Beneficial Interests in Domestic Real Estates) (total acquisition

price of JPY 13,261 million) on February 6, 2015 as follows.

Use

Hotel

Acquisition
Price

Appraisal Valueat Acquisition(JPY million)(Note 1)(JPY million)(Note 2)

SellerCategoryofSpecified
Assets

8,500

AYK Tokutei
Mokuteki Kaisha

Trust
Beneficial
Interest

2,792

2,820

Zephyrus Tokutei
Mokuteki Kaisha

Trust
Beneficial
Interest

2,119

2,140

Nishi Tokutei
Mokuteki Kaisha

Trust
Beneficial
Interest

13,261

13,460Property
Number

Property Name

D21

APA Hotel
Yokohama Kannai

Yokohama,
Kanagawa

8,350

D22

Hotel Nets
Hakodate

Hakodate
City,
Hokkaido

D23

Flexstay Inn
Shirogane

Minato-ku,
Tokyo

Total

Location(Note 1) Acquisition prices do not include adjustments for property taxes or city planning taxes, or national or local consumption taxes.
(Note 2) Appraisal value at Acquisition is the appraisal value as of December 1, 2014 based on the appraisal report from Japan Real Estate
Institute.

10

(b)

Financing
INV obtained new debt financing (hereinafter the “Financing”) in order to procure funds for the acquisition of 3

hotel properties (trust beneficiary interests in domestic real estate), which were acquired on February 6, 2015 as follows.

Borrowing
Date

LenderSumitomo Mitsui Banking Corporation
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Mizuho Bank, Ltd.
Citibank Japan Ltd.
Shinsei Bank, Limited
Sumitomo Mitsui Trust Bank, Limited
Resona Bank, Limited

February
6, 2015

BorrowingAmountInterestRate(annual)Principal
Maturity
Date

Borrowing
MethodJPY 6,241
million0.93000％
Variableinterest
rate(Note 1)February
6, 2018

Secured(Note 2) /with noguarantee(Note 1)

Interest rate applicable for the period from February 6, 2015 to February 26, 2015.
One-month JPY TIBOR + spread (0.8%); however, two-month JPY TIBOR + spread (0.8%) for the firstinterest calculation period only

(Note 2)First priority pledges over the real estate trust beneficiary interests for 3 properties: APA Hotel YokohamaKannai, Hotel Nets Hakodate, Flexstay Inn Shirogane, and 65 properties: Nisshin Palacestage Daitabashi,
Nisshin Palacestage Higashi-Nagasaki, Growth Maison Gotanda, Growth Maison Kameido, Emerald House,
Harmonie Ochanomizu, Suncrest Shakujii Koen, Growth Maison 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
Crescent 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 ShinUrayasu Conference Center, Hotel MyStays Maihama, Hotel Vista Premio Dojima, Hotel MyStays NagoyaSakae, 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 2 realestate properties: Shinjuku Island and Times Kanda-Sudacho 4th.

11dOperational Outlook
The following forecast is made for the fiscal period ending June 30, 2015 and the fiscal period ending December

31, 2015.

The Fiscal Period ending June 30, 2015(from January 1, 2015 to June 30, 2015)
Operating Revenues

JPY 4,631 million

Operating Income

JPY 2,439 million

Ordinary Income

JPY 1,903 million

Net Income

JPY 1,902 million

Earnings per Unit

JPY 712

Reversal of Surplus per Unit

JPY 0Distribution per Unit (Excluding excess profit distribution per unit)

JPY 712

Excess Profit Distribution per Unit

JPY 0

INV plans to distribute all of the net income except for a fractional portion in which Distribution Per Unit is lessthan JPY 1, using the proceeds from net income for the fiscal period ending June 30, 2015.

The fiscal period ending December 31, 2015 (from July 1, 2015 to December 31, 2015)
Operating Revenues

JPY 5,034 million

Operating Income

JPY 2,812 million

Ordinary Income

JPY 2,294 million

Net Income

JPY 2,293 million

Earnings per Unit

JPY 859

Reversal of Surplus per Unit

JPY 0Distribution per Unit (Excluding excess profit distribution per unit)

JPY 859

Excess Profit Distribution per Unit

JPY 0

INV plans to distribute all of the net income except for a fractional portion in which Distribution per Unit is lessthan JPY 1, using the proceeds from net income for the fiscal period ending December 31, 2015.

INV presents full year figures for financial results and distribution for information purpose only because rental
revenues of hotel properties tend to fluctuate by season.
(Reference) 2015 Annual (total of the fiscal periods ending June 30, 2015 and December 31, 2015)
Operating Revenues

JPY 9,665 million

Operating Income

JPY 5,251 million

Ordinary Income

JPY 4,197 million

Net Income

JPY 4,196 million

Earnings per Unit

JPY 1,571

Reversal of Surplus per Unit

JPY 0Distribution per Unit (Excluding excess profit distribution per unit)

12

JPY 1,571

Excess Profit Distribution per Unit

JPY 0

For the assumptions underlying the operational outlook for the fiscal periods ending June 30, 2015 and ending
December 31, 2015, please see “Assumptions for the Forecasts for the Fiscal Periods ending June 30, 2015 (fromJanuary 1, 2015 to June 30, 2015) and for the Fiscal Period ending December 31, 2015 (from July 1, 2015 to December
31, 2015)”.
(Cautionary Note regarding Forward Looking Statements)
Forward looking statements such as the forecasts set forth herein are based on information currently available andcertain assumptions that are deemed reasonable. Actual operating performance may vary significantly due to factors notforeseen at the time of this present notice, such as the occurrence of gains and losses associated with the sale ofproperties, repayment of borrowings and a decrease in rent received.

Also, this forecast is not a guarantee of

distribution amounts.
Assumptions for the Forecasts for the Fiscal Period ending June 30, 2015 (from January 1, 2015 to June 30, 2015) and the Fiscal
Period ending December 31, 2015 (from July 1, 2015 to December 31, 2015)
Item
Fiscal Period

Assets under Management

Units Outstanding

Assumptions
Fiscal Period ending June 30, 2015:
From January 1, 2015 to June 30, 2015 (181 days)
Fiscal Period ending December 31, 2015: From July 1, 2015 to December 31, 2015 (184 days)
Number of properties held by INV as of the end of the fiscal period ending June 30, 2015:
94 properties
Number of properties held by INV as of the end of the fiscal period ending December 31, 2015:
94 properties
The assets under management are based on the 94 properties held by INV as of today. Also,
INV assumes there will be no new acquisitions or disposals of existing properties thereafter
through to the end of the fiscal period ending December 31, 2015.
Number of units issued and outstanding as of the end of the fiscal period ending June 30, 2015:
2,668,686 units
Number of units issued and outstanding as of the end of the fiscal period ending December 31,
2015:
2,668,686 units
INV assumes there will be no additional issuance of investment units thereafter through to theend of the fiscal period ending December 31, 2015.
Balance of borrowing at the end of the fiscal period ending June 30, 2015: JPY 72,301 million
Balance of borrowings as of the end of the fiscal period ending December 31, 2015: JPY 71,961
millionInterest-bearing Liabilities

INV assumes that: JPY 1,200 million of the existing borrowing, New Syndicate Loan (C), will
be repaid as the borrowing corresponding to the return of consumption tax in the fiscal period
ending June 2015; JPY 321 million of the new loan, New Syndicate Loan (D), will be repaid as
the borrowing corresponds to the return of consumption tax in the fiscal period ending December
2015; and JPY 18 million of the Prudential LPS Loan B will be repaid in accordance with thecontract.
INV assumes the following rental revenues regarding the operating revenues for each of theapplicable fiscal periods.
Fiscal Period ending
Fiscal Period ending
June 30, 2015
December 31, 2015

Operating Revenues

Rental revenues

JPY 4,631 million

JPY 5,034 million(of these, hotel revenues)(JPY 1,993 million)(JPY 2,410 million)(of these, fixed rent master lease)(JPY 942 million)(JPY 1,067 million)(of these, variable rent lease)(JPY 1,050 million)(JPY 1,342 million)* Rental revenues are calculated based on historical data thus obtained and taking into accounttenant trends, property competitiveness, the market environment and other factors. In

13

Item

Assumptions
addition, INV assumes there will be no delinquencies or non-payment of rent by tenants.
INV assumes it will incur the property-related expenses regarding the operating expenses foreach of the applicable fiscal periods.

Operating Expenses

NOI

Fiscal Period ending
Fiscal Period ending
June 30, 2015
December 31, 2015
JPY 492 million
JPY 479 million
・Facility management fees(of these, repair costs)(JPY 40 million )(JPY 40 million)
JPY 204 million
JPY 255 million
・Taxes and other public charges
JPY 7 million
JPY 7 million
・Insurance expenses
JPY 164 million
JPY 141 million
・Other expenses
JPY 1,005 million
JPY 1,025 million
・Depreciation expenses
Total of property related expenses
JPY 1,874 million
JPY 1,909 million
For those other than these property-related expenses regarding the operating expenses, INV
assumes it will incur the following amounts for each of the applicable fiscal periods.
Fiscal Period ending
June 30, 2015

Fiscal Period ending
December 31, 2015

・Amount other than property
related expenses

JPY 317 million

JPY 312 million(of these, asset management fees)(JPY 180 million)(JPY 180 million)

Fiscal Period ending
June 30, 2015

Fiscal Period ending
December 31, 2015

・NOI

JPY 3,762 million

JPY 4,150 million(of these, hotel NOI)(JPY 1,907 million)(JPY 2,277 million)

INV assumes it will incur the following non-operating expenses for each of the applicable fiscal
periods.

Non-operating Expenses
・Interest expenses
・Finance related costs
・Other non-operating expenses
Total of non-operating expenses

Distribution per Unit

Fiscal Period ending
June 30, 2015
JPY 392 million
JPY 144 million
JPY JPY 536 million

Fiscal Period ending
December 31, 2015
JPY 398 million
JPY 118 million
JPY JPY 517 million

The distribution per unit is calculated in accordance with the cash distribution policy set forth in
INV’s articles of incorporation.

Excess Profit Distribution per INV currently does not expect to make distributions in excess of profits (excess profit
Unit
distribution per unit).

OthersINV assumes there will be no amendments to laws and ordinances, the taxation system,
accounting standards and other regulations that will affect the foregoing forecasts.
In addition, INV assumes there will be no unforeseen material changes in the market
environment, including general economic trends and real estate market conditions.

14

3. Financial Statements(1)

Balance Sheets(Unit: thousands of yen)
Fiscal Period ended
December 31, 2014(as of December 31, 2014)

Fiscal Period ended
June 30, 2014(as of June 30, 2014)
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Accrued revenue
Accounts receivables
Prepaid expenses
Consumption tax receivable
Advance payment
OthersAllowance for doubtful accounts
Total current assets※1 759,058※1 9,153,872※1 2,765,504※1 4,011,521

2,574
71,193
120,941
17,1380(1,391)

82
644,552
233,324
1,319,253
0(1,968)3,735,018

15,360,637※1 85,914※1 85,914(7,783)(8,324)

78,131

77,589※1 38,862※1 38,862(17,352)(18,548)

21,51020,314※1 2,779※1 2,779(1,138)(1,204)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

1,640

1,574

※1 711,834※1 711,834※1 31,162,188※1 45,227,883(2,623,404)(3,136,903)

Buildings in trust, net

28,538,783

42,090,979

Equipment in trust
Accumulated depreciation※1 7,151,824※1 10,400,867(1,891,879)(2,186,062)

Equipment in trust, net

5,259,944

8,214,804

Building improvements in trust
Accumulated depreciation※1 321,317※1 321,799(109,047)(118,744)

212,270203,054※1 177,438※1 268,476(85,898)(103,974)

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
Total investment and other assets
Guarantee deposits
Long-term prepaid expenses
Others15

91,540164,502※1 40,447,565※1 63,258,940

75,363,220

114,743,593

106

76

106

76

10,000
119,338
34,07010,000328,159
34,765

Total investments and other assets

Fiscal Period ended
June 30, 2014(as of June 30, 2014)
163,409(Unit: thousands of yen)
Fiscal Period ended
December 31, 2014(as of December 31, 2014)
372,924

75,526,736

115,116,594

79,261,754

130,477,232

Total non-current assets
Total assets

16

Fiscal Period ended
June 30, 2014(as of June 30, 2014)
Liabilities
Current liabilities
Accounts payable
Short-term debts
Current portion of long-term debts
Current portion of long-term debts in trust
Accrued liabilities
Accrued expenses
Accrued income taxes
Accrued consumption taxes
Advances received
Deposits received

143,439(Unit: thousands of yen)
Fiscal Period ended
December 31, 2014(as of December 31, 2014)

32,733
121,934520
143,637
357,52232,927

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

Total current liabilities

31,873,567

1,905,197

Non-current liabilities
Long-term debts
Long-term debts in trust※1 9,960,000※156,100,000

Tenant leasehold and security deposits in trust
Tenant leasehold and security deposits

1,025,726
28,663

1,109,146
28,663

Total non-current liabilities

11,014,390

67,179,642

42,887,957

69,084,839

29,134,389

53,096,413

6,264,432
974,975

6,264,432
2,031,546

7,239,407

8,295,978※1 13,488,750※1 17,552,100

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

17※1 9,941,832

36,373,796

61,392,392※2 36,373,796※2 61,392,392

79,261,754

130,477,232

(2)Statement of Income
Fiscal Period ended
June 30, 2014
(from January 1, 2014 toJune 30, 2014)

Operating revenues
Rental revenues
Gain on sales of properties※1 2,772,419(Unit: thousands of yen)
Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)※1 4,610,717※2 1,003,352-

3,775,772

4,610,717※1 1,281,791※1 1,586,854

125,000
4,800
3,906
18,224
107,404
1,541,127
2,234,644

125,000
4,800
3,976
26,672
1,527
91,966
1,840,796
2,769,920

404
475
898

537
483

Total non-operating revenues

1,777

1,021

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

376,514842,043
115,4385

365,480
294,738
152,101
14

Total non-operating expenses

Total operating revenues
Operating expenses
Property related expenses
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
Reversal of allowance for doubtful accounts
Miscellaneous income

1,334,001

812,334

Ordinary income

902,420

1,958,607

Net income before taxes

902,420

1,958,607

605

605

Corporate tax, etc.
Total corporate tax, etc.

605

605

Net income

901,815

1,958,002

Retained earnings at the beginning of the period
Unappropriated retained earnings/Loss at the end of theperiod73,15973,543974,975

2,031,546

18

(3)

Statement of Unitholders’ Equity

Fiscal Period ended June 30, 2014 (from January 1, 2014 to June 30, 2014)(Unit: thousands of yen)
Unitholders’ Equity
Surplus
Total Unitholders’EquityTotal Net Assets

Capital Surplus

UnappropriatedRetained
Earnings/Loss

6,264,432

446,0036,710,435

35,844,824

35,844,824

Distributions fromsurplus(372,843)(372,843)(372,843)(372,843)

Net income

901,815

901,815

901,815

901,815

Unitholders’ Capital

Balance at the beginningof the period

29,134,389

Total Surplus

Change during the period

Total change during theperiodBalance at the end of theperiod--528,972

528,972

528,972

528,972

29,134,389

6,264,432

974,975

7,239,407

36,373,796

36,373,796

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

Balance at the beginningof the period

29,134,389

Capital Surplus

UnappropriatedRetained
Earnings/Loss

6,264,432

974,975

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
Issuance of new
investment units
Distributions fromsurplus23,962,024

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

19

(4)

Statement of Cash Distribution

Fiscal Period ended June 30, 2014
Fiscal Period ended December 31, 2014
(from January 1, 2014 to June 30, 2014) (from July 1, 2014 to December 31, 2014)
I

Unappropriated retained earnings

974,975,488 yen

2,031,546,537 yen

IIDistribution amount

901,431,567 yen

1,956,146,838 yen(573 yen)(733 yen)

73,543,921 yen

75,399,699 yen

In accordance with the distribution
policy set forth in Article 17, Paragraph
1 of the Articles of Incorporation of
INV, the distribution amount shall be
the amount which does not exceed theamount of profits but exceeds 90% of
the distributable profit as defined in
Article 67-15 of the Special Taxation
Measures Act. However, in the eventthat any tax losses arise, or if no profits
have been recorded for tax purposesdue to tax losses carried forward, thedistribution amount may be as reasonably
determined by INV. Pursuant to thispolicy, INV determined the distribution
amount to be 901,431,567 yen out of
the net income of 901,815,748 yen.
INV did not distribute any amounts inexcess of profit, as set forth in Article
17, Paragraph 4 of the Articles ofIncorporation.

In accordance with the distribution
policy set forth in Article 17, Paragraph
1 of the Articles of Incorporation of
INV, the distribution amount shall be
the amount which does not exceed theamount of profits but exceeds 90% of
the distributable profit as defined in
Article 67-15 of the Special Taxation
Measures Act. However, in the eventthat any tax losses arise, or if no profits
have been recorded for tax purposesdue to tax losses carried forward, thedistribution amount may be as reasonably
determined by INV. Pursuant to thispolicy, INV determined the distribution
amount to be 1,956,146,838 yen out of
the net income of 1,958,002,616 yen.
INV did not distribute any amounts inexcess of profit, as set forth in Article
17, Paragraph 4 of the Articles ofIncorporation.

(Distribution per unit)
III Retained earnings carried forward
Calculation method of distribution
amount20

(5)Statement of Cash Flows
Fiscal Period ended
June 30, 2014
(from January 1, 2014 toJune 30, 2014)(Unit: thousands of yen)
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(87,869)(673)

Increase (decrease) in accrued liabilities
Increase (decrease) in accrued expenses
Increase (decrease) in advances received
Increase (decrease) in deposits received
Decrease in property and equipment due to sale
Others(1,613)
18,110(28,364)
10,9094,367,451(6,762)(10,409)
2,933
13,561(9,776)
5,533

Subtotal

7,125,015

1,572,798

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

404
(502,533)
(609)

537
(363,177)(547)

Cash flows from operating activities

6,622,276

1,209,610(5,618,018)(154,916)(40,203,087)-(93,087)(47,787)

81,527

131,585

Cash flows from investing activities
Payment for acquisition of tangible assets in trust
Repayment of tenant leasehold and security deposits
Repayment of tenant leasehold and security deposits
in trust
Proceeds of tenant leasehold and security deposits intrust
OthersCash flows from investing activities
Cash flows from financing activities
Proceeds from short-term debt
Repayment of short-term debt
Proceeds from long-term debt
Repayment of long-term debt
Repayment of long-term debt in trust
Finance related costs
Payment of distributions
Proceeds from issuance of investment units
Payment of investment unit issuance expenses
Cash flows from financing activities
Increase (decrease) in cash and cash equivalents
Beginning balance of cash and cash equivalents

21

902,420
527,945
115,438
842,043

1,958,607
837,289
152,101
294,738

(435)

(378)

(404)
376,514(1,181)(60,244)
7,419

(537)
365,480577(573,359)(1,319,253)

143,637(143,637)(17,833)(694)(5,802,328)(40,119,985)

13,500,000(11,250)(2,797,899)(11,000,000)(732,126)(342,802)(98,468)(1,482,546)(662,597)
4,187,160(13,488,750)
57,300,000(17,552,100)(618,099)(900,512)
23,962,024(151,356)
48,551,206
9,640,831
3,524,562

Closing balance of cash and cash equivalents

Fiscal Period ended
June 30, 2014
(from January 1, 2014 toJune 30, 2014)※1 3,524,562

22(Unit: thousands of yen)
Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)※1 13,165,393

(6)Notes Concerning Going Concerns Assumption

None
(7)

Notes Concerning Significant Accounting Policies

1. Method of depreciation of non-current assets(a) Property, plant and equipment
The straight-line method is used.
The useful lives of major property, plant and 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.
2. Method of calculating allowances
Allowance for doubtful accounts
To reserve for losses on doubtful accounts, allowances are provided for normal receivables using a rate determined basedon past bad debt experiences, and specific allowances are provided for accounts with a possibility of default based on theestimated amounts considered to be uncollectible by considering the collectability of accounts on an individual basis.
3. Revenue and expense recognition
Accounting treatment of property taxes and other taxes
With respect to property taxes, city planning taxes and depreciable asset taxes, of the tax amount assessed anddetermined, the amount corresponding 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 amount equivalent to property taxes is capitalized aspart of the acquisition cost of the real estate or trust beneficiary interests in real estate instead of being charged as expense.
The amount equivalent to property taxes that was included as part of the acquisition of real estate during this fiscal period is
JPY 76,921 thousand.

4. Cash and cash equivalents as stated in Statement of Cash Flows
Cash and cash equivalents as stated in the Statement of Cash Flows consist of cash on hand and cash in trust, floating
deposits, deposits in trust and short-term investments that are very liquid and realizable with a maturity of three months orless when purchased and that are subject to insignificant risks of changes in value.

235. Other significant matters which constitute the basis for preparation of financial statements(i) Accounting treatment of trust beneficiary interests in real estate
As to trust beneficiary interests in real estate, all accounts of assets and liabilities within assets in trust, as well as all
income generated and expenses incurred from assets in trust, are recorded in the relevant balance sheets and income
statement accounts. Of such items, the following significant trust assets and liabilities are shown separately on the balance
sheet.
(a) Cash and deposits in trust(b) Buildings in trust
Equipment in trust
Building improvements in trust
Tools, furniture and fixtures in trust
Land in trust(c) Tenant leasehold and security deposits in trust(d) Current portion of long-term debts in trust
Long-term debts in trust(ii) Accounting treatment of deferred charges
Investment unit issuance expenses
The full amount is recorded as expense at the time of expenditure.
(iii) Accounting treatment of consumption taxes
Transactions subject to consumption taxes are recorded at amounts exclusive of consumption taxes.
(8)Notes to the Financial Statements(Notes to the Balance Sheets)※1.

Assets pledged as collateral and liabilities with collateral

Assets pledged as collateral are as follows.
Fiscal Period ended
June 30, 2014(as of June 30, 2014)
153,187(Unit: thousands of yen)
Fiscal Period ended
December 31, 2014(as of December 31, 2014)
4,262,187

2,765,504

4,011,521

Buildings

78,131

77,589Equipment

21,51020,314

Cash and deposits
Cash and deposits in trust

Building improvements

1,640

1,574

711,834

711,834

Buildings in trust

28,538,783

42,090,979

Equipment in trust

5,259,944

8,214,804

212,270203,054

Land

Building improvements in trust
Tools, furniture and fixtures in trust
Land in trust
Total

91,540164,50240,447,565

63,258,940

78,281,912

123,017,302

Liabilities with collateral are as follows.
Fiscal Period ended
June 30, 2014(as of June 30, 2014)24(Unit: thousands of yen)
Fiscal Period ended
December 31, 2014(as of December 31, 2014)

Short-term debts

13,488,750-

Current portion of long-term debts

17,552,100

1,200,000

Current portion of long-term debts in trust-

18,167Long-term debts-

56,100,000

Long-term debts in trust
Total

9,960,000

9,941,832

41,000,850

67,260,000※2. Minimum net assets as required by Article 67, Paragraph 4 of the Act on Investment Trusts and Investment Corporations
Fiscal Period ended
June 30, 2014(as of June 30, 2014)
50,000(Unit: thousands of yen)
Fiscal Period ended
December 31, 2014(as of December 31, 2014)
50,00025

(Notes to Statement of Income)※1.

Rental revenues and property related expenses(Unit: thousands of yen)
Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)

Fiscal Period ended
June 30, 2014
(from January 1, 2014 toJune 30, 2014)
A.

Real property rental revenues

Rent/common area charges

2,555,746

4,408,874

216,673

201,8432,772,419

4,610,717

Maintenance costs

446,688

460,196

Taxes and public dues

174,451

163,789

Other revenues
Total
B.

Real property related expenses

Insurance expenses

4,952

6,084

Other expenses

127,784

119,524

Depreciation expenses

527,914837,259

Total

1,281,791

1,586,854

C.

1,490,627

3,023,863

Operating income from rental revenues (A-B)※2.

Gain on sales of properties

Fiscal Period ended June 30, 2014 (from January 1, 2014 to June 30, 2014)Bon Sejour
Chitose Funabashi
Proceeds from sales ofproperties
Cost of sales ofproperties
Other expenses onsales of properties
Gain on sales ofproperties

Bon Sejour Hino

832,153

777,256

730,459

587,138

657,193622,386

551,565

468,167

6,623

5,450

5,414

4,363

168,337

149,419

173,480

114,607

Bon Sejour Komaki
Proceeds from sales ofproperties
Cost of sales ofproperties
Other expenses onsales of properties
Gain on sales ofproperties

Bon Sejour Yotsugi(Unit: thousands of yen)
Bon SejourMusashi Shinjo

Bon Sejour
Hadano Shibusawa

Bon Sejour Itami

1,280,824

735,268

472,718

984,869

633,486

449,783

12,563

6,243

4,357

283,391

95,53918,577

Fiscal Period ended December 31, 2014 (from July 1, 2014 to December 31, 2014)
None

26

(Notes to Statement of Unitholders’ Equity)
Number of investment units authorized and number of investment units issued and outstanding
Fiscal Period ended
Fiscal Period ended
June 30, 2014
December 31, 2014
(from January 1, 2014 to(from July 1, 2014 toJune 30, 2014)
June 30 December 31, 2014)
Number of investment units authorized
10,000,000 units
10,000,000 units
Number of investment units issued and outstanding

1,573,179 units

2,668,686 units(Notes to Statement of Cash Flow)
Relationship between cash and cash equivalents in statement of cash flows and amounts in accompanying balance sheet(Unit: thousands of yen)
Fiscal Period ended
Fiscal Period ended
June 30, 2014
December 31, 2014
(from January 1, 2014 to(from July 1, 2014 toJune 30, 2014)
December 31, 2014)
Cash and deposits
759,058
9,153,872※1.

Cash and deposits in trust

2,765,504

4,011,521

Cash and cash equivalents

3,524,562

13,165,393

27

(Notes Related to Lease Contracts)
Operating lease transactions (as lessee)
Remaining lease payments
Fiscal Period ended
June 30, 2014(as of June 30, 2014)
112,249(Unit: thousands of yen)
Fiscal Period ended
December 31, 2014(as of December 31, 2014)
112,249

Due after one year

2,280,288

2,224,164

Total

2,392,537

2,336,413

Fiscal Period ended
June 30, 2014(as of June 30, 2014)
507,089(Unit: thousands of yen)
Fiscal Period ended
December 31, 2014(as of December 31, 2014)
1,843,409

Due after one year

4,342,958

15,485,197

Total

4,850,048

17,328,607

Due within one year

Operating lease transactions (as lessor)
Remaining lease payments

Due within one year

(Notes Related to Financial Instruments)
1.

Status of financial instruments(1) Policy for financial instruments
INV principally conducts its operations through investments in real estate and other specified assets to seek to ensurestable 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 rate increases,
etc. and not for speculation. There are currently 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.

(2) Nature and extent of risks arising from financial instruments and risk management
The funds raised through borrowings are mainly used to acquire real estate properties or properties in trust (including
related acquisition costs) and for the repayment of existing debt. Liquidity risks relating to debt are managed by the financedepartment of the Asset Manager by preparing and updating plans for funds, and monitoring the covenants set forth in loan
agreements.

(3) Supplemental information regarding market value, etc. for financial instruments
The fair value of financial instruments is based on quoted market prices if available. When quoted market prices are notavailable, fair value is estimated using valuation techniques which contain various assumptions. If other valuation models orassumptions were used, the estimated value may differ.

28

2.

Estimated fair value of financial instruments

Book value, fair value and the difference between values as of June 30, 2014 are as follows.
(Unit: thousands of yen)Book Value(1) Cash and deposits

Fair Value

Difference

759,058

759,058-(2) Cash and deposits in trust

2,765,504

2,765,504-

Total assets

3,524,562

3,524,562-(3) Short-term debts

13,488,750

13,488,750-(4) Current portion of long-term debts

17,552,100

17,552,100-(5) Long-term debts

-

-

-

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

-

-

-

9,960,000

10,122,527

162,527

41,000,850

41,163,378

162,527(7) Long-term debts in trust
Total liabilities

Book value, fair value and the difference between values as of December 31, 2014 are as follows.
(Unit: thousands of yen)Book Value

Fair Value

Difference(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

13,165,393

-

-

-

-

(4) Current portion of long-term debts

1,200,000

1,200,000-(5) Long-term debts

56,100,000

56,100,000-

18,167

18,251

84

9,941,832

10,156,234

214,401

67,260,000

67,474,486

214,486(3) Short-term debts(6) Current portion of long-term debts in trust(7) Long-term debts in trust
Total liabilities(Note 1) Methods to calculate fair values of financial instruments(1) Cash and deposits(2) Cash and deposits in trust(3) Short-term debts

Due to the short maturities, the book value of these instruments is deemed a reasonable approximation of the fair value,
and therefore, the book value is used as the fair value.
(4) Current portion of long-term debts(5) Long-term debts(6) Current portion of long-term debts in trust(7) Long-term debts in trust
The fair values of long-term debt with fixed interest rates are determined based on the present value of contractual cash
flows discounted at current market interest rates which would be applicable to new debt with the same amount.
Long-term debt with floating interest rates reflecting changes in market rates within a short term period are stated at theirbook value as their book values approximate their fair values.
(Note 2) Financial instruments for which fair value is extremely difficult to value
Fiscal Period ended
June 30, 2014(as of June 30, 2014)(Unit: thousands of yen)
Fiscal Period ended
December 31, 2014(as of December 31, 2014)

Tenant leasehold and28,663
28,663security deposits
Tenant leasehold and1,025,726
1,109,146
security deposits in trust
Tenant leasehold and security deposits and tenant leasehold and security deposits in trust have no observable market

29

price, and it is impracticable to reasonably estimate their future cash flows because it because the repayment dates of those
deposits and the timing of the lessee’s exit from the property are not certain. Thus, their fair value is not disclosed.
(Note 3) Remaining schedule of monetary claims after the closing date of the fiscal period
As of June 30, 2014
(Unit: thousands of yen)
Due after One Due after Two Due after Three Due after Four Due after Five
to Two Years to Three Years to Four Years to Five Years
Years

Due within
One Year
Cash and deposits
Cash and deposits in trust
Total

759,058

-

-

-

-

-

2,765,504

-

-

-

-

-

3,524,562

-

-

-

-

-

As of December 31, 2014
(Unit: thousands of yen)
Due after One Due after Two Due after Three Due after Four Due after Five
to Two Years to Three Years to Four Years to Five Years
Years

Due within
One Year
Cash and deposits

9,153,872

-

-

-

-

-

Cash and deposits in trust

4,011,521

-

-

-

-

-

13,165,393

-

-

-

-

-

Total

(Note 4) Redemption schedule of long-term debts and other interest-bearing indebtedness after the closing date of the fiscal period
As of June 30, 2014
(Unit: thousands of yen)
Due after One Due after Two Due after Three Due after Four Due after Five
to Two Years to Three Years to Four Years to Five Years
Years

Due within
One Year
Current portion of long-term
debts
Long-term debts
Current portion of long-term
debts in trust
Long-term debts in trust
Total

17,552,100

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

54,894

74,6392,863,679

5,217,347

1,749,439

17,552,100

54,894

74,6392,863,679

5,217,347

1,749,439

As of December 31, 2014
(Unit: thousands of yen)
Due after One Due after Two Due after Three Due after Four Due after Five
to Two Years to Three Years to Four Years to Five Years
Years

Due within
One Year
Current portion of long-term
debts
Long-term debts
Current portion of long-term
debts in trust
Long-term debts in trust
Total

1,200,000

-

-

-

-

-

-

-

56,100,000

-

-

-

18,167

-

-

-

-

-

-

73,807104,256

2,894,530

5,143,274

1,725,963

1,218,167

73,80756,204,256

2,894,530

5,143,274

1,725,963

30

(Notes Related to Investment Securities)
None(Notes Related to Derivative Transactions)
None(Notes Related to Retirements Payments)
None(Notes Related to Asset Retirement Obligations)
None(Notes Related to Segment and Related Information)
I. Segment Information
Disclosure is omitted because the real estate investment business is the INV’s sole business and it has no reportablesegments.
II. Related Information
Fiscal Period ended June 30, 2014 (from January 1, 2014 to June 30, 2014)
1. Information about each product and service
Disclosure is omitted because net sales to external customers for a single product/service category accounted for over
90% of the operating revenue on the statement of income.
2. Information about each geographic area
(1) Net sales
Disclosure is omitted because net sales to external customers in Japan accounted for over 90% of the operating
revenue on the statement of income.
(2) Property, plant and equipment
Disclosure is omitted because the amount of property, plant and equipment located in Japan accounted for over 90%of the amount of property, plant and equipment on the balance sheet.
3. Information about each major customer
Disclosure is omitted because net sales to any single external customer accounted for less than 10% of theoperating revenue on the statement of income.
Fiscal Period ended December 31, 2014 (from July 1, 2014 to December 31, 2014)
1. Information about each product and service
Disclosure is omitted because net sales to external customers for a single product/service category accounted for over
90% of the operating revenue on the statement of income.
2. Information about each geographic area
(1) Net sales
Disclosure is omitted because net sales to external customers in Japan accounted for over 90% of the operating
revenue on the statement of income.
(2) Property, plant and equipment

31

Disclosure is omitted because the amount of property, plant and equipment located in Japan accounted for over
90% of the amount of property, plant and equipment on the balance sheet.
3. Information about each major customer(Unit: thousands of yen)
Name of Customer

Operating revenues

MyStays Hotel Management Co., Ltd.

1,722,789

32

Related segment
Real Estate Investment

(Notes Related to Rental Properties)
INV owns residential properties and hotels as core assets and owns other various properties including offices and retails
principally in the Tokyo area and major regional cities in order to aim for the establishment of the portfolio which focuses onboth improvement of stability and growth potential. The book value, amount changed during the period and balance at the endof the period are as follows.

Residential

Book value

Balance at the
beginning of the period
Change during theperiodBalance at the end of
the period

Fair value at the end of the period

OfficeBook value

Balance at the
beginning of the period
Change during theperiodBalance at the end of
the period

Fair value at the end of the period

RetailBook value

Balance at the
beginning of the period
Change during theperiodBalance at the end of
the period

Fair value at the end of the period

ParkingBook value

Balance at the
beginning of the period
Change during theperiodBalance at the end of
the period

Fair value at the end of the period

SeniorBook value

Balance at the
beginning of the period
Change during theperiodBalance at the end of
the period

Fair value at the end of the period

HotelBook value

Balance at the
beginning of the period
Change during theperiodBalance at the end of
the period

Fair value at the end of the period

Total

Book value

Balance at the
beginning of the period
Change during theperiodBalance at the end of
the period

Fair value at the end of the period

Fiscal Period ended
June 30, 2014
(from January 1, 2014 toJune 30, 2014)(Unit: thousands of yen)
Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)

56,192,804

55,874,464(318,340)(304,706)

55,874,464

55,569,758

58,865,000

60,775,000

8,585,639

8,579,951(5,687)(28,342)

8,579,951

8,551,609

7,288,000

7,227,000

5,318,657

5,275,638(43,018)(50,243)

5,275,638

5,225,394

5,520,000

5,690,000

100,838

100,825(13)(1)

100,825

100,823

105,000

107,000

4,385,522-(4,385,522)

-

-

-

-

-

-

5,532,341

5,532,341

39,763,665

5,532,341

45,296,007

5,490,000

52,759,000

74,583,461

75,363,220

779,759

39,380,372

75,363,220

114,743,593

77,268,000

126,558,000(Note 1) Book value is the figure calculated by decreasing the amount of depreciation from acquisition price (including
acquisition-related costs).

33

(Note 2) The major factor of the increase for the fiscal period ended June 30, 2014 was acquisition of new hotels and capital
expenditures related to construction work, and the major factor of the decrease was sale of senior housing propertiesand depreciation. The major factor of the increase for the fiscal period ended December 31, 2014 was acquisition of
new hotels and capital expenditures related to construction work, and the major factor of the decrease wasdepreciation.
(Note 3) The fair value as of the end of the reporting period is determined based on the appraisal value provided by Asset
Research and Development Inc., Japan Real Estate Institute, Morii Appraisal & Investment Consulting Inc. andTanizawa Sogo Appraisal Co., Ltd.
For information related to profits and losses from rental properties, please refer to “Notes to Statement of Income.”

34

(Notes Related to Tax Accounting)1.

Significant components of deferred tax assets and liabilities(Unit: thousands of yen)
Fiscal Period ended
June 30, 2014

Fiscal Period ended
December 31, 2014

(Deferred tax assets - current assets)
Enterprise tax payable

517-

Accounts receivable (merger)

197

197

Allowance for doubtful accounts

475

672

Subtotal

1,190

870

Valuation allowance

1,190

870

Total

-

-

(Net deferred tax assets - current)--(Deferred tax assets - non-current assets)
Buildings and other (merger)
Land (merger)

812,820801,0252,251,597

2,251,597

Long-term accrued expenses

7,746,144

7,749,271

Subtotal

10,810,561

10,801,895

Valuation allowance

10,810,561

10,801,895

Total

-

-

(Net deferred tax assets - non-current)

-

-

2.

Significant difference between statutory tax rate and the effective tax rate
(Unit: %)Fiscal Period ended
June 30, 2014

Statutory tax rate

Fiscal Period ended
December 31, 2014
36.59

34.16

-

(33.54)

Provision of reserve for reduction entry(34.98)(0.46)

Others(1.54)(0.13)

Effective tax rate

0.07

0.03

Deductible cash distributions

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 be changed to 34.16% for temporary
differences, etc. which are expected to be eliminated in the fiscal period starting after January 1, 2015. This change in tax rate
has no effect on the amounts of deferred tax assets and liabilities, and deferred income taxes.
(Notes Related to Equity-Method Income)
None

35

(Notes Related to Transactions with Related Parties)
1.

Transactions with Parent Company and Major Unitholders
Fiscal Period ended June 30, 2014 (from January 1, 2014 to June 30, 2014)

Classification

Name

Address

StatedCapital Business or(Millions Occupationof yen)Ratio of
VotingRightsOwned(%)

RelationshipCommon Business
Board RelationMember
shipType ofTransaction

Transaction
Amount(Thousandsof yen)(Note 1)

Account

Balance atthe End of
the Period(Thousandsof yen)(Note 1)

Seller of Purchase of
trust
trust
Zephyrus Tokutei
benefibeneficiary
Minato-ku,
Mokuteki Kaisha
ciary2,851,000
interests in
Tokyo(Note 3)interests
real estate
in real(Note 2)
Interested party
estate(Note 5)of the Asset
Seller of Purchase ofManagertrust
trust
Investment
Nishi Tokutei
benefibeneficiary
Minato-ku,
manageMokuteki Kaisha
0.1
ciary interests in real 2,584,000
Tokyo
ment
(Note 3)interests
estatebusinessin real(Note 2)
estate(Note 5)(Note 1) Consumption taxes are not included in transaction amounts, but are included in the balance at 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 thesponsor company.
(Note 3) Zephyrus Tokutei Mokuteki Kaisha and Nishi Tokutei Mokuteki Kaisha have no capital relationship with the Asset Manager to be disclosed.
The funds have received an anonymous partnership investment through funds that are managed by FIG, an affiliate of Calliope. Accordingly,
INV treats Zephyrus Tokutei Mokuteki Kaisha and Nishi Tokutei Mokuteki Kaisha as the equivalent of interested party.
(Note 4) Calliope holds 609,942 units (holding ratio: 38.77%) 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 notincluded.
Investment
manage0.1
ment
business

Property Number
D1
D2

Name of Property
Hotel MyStays Kanda
Hotel MyStays Asakusa
Total

Purchase Price (Thousands of yen)
2,851,000
2,584,000
5,435,000

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

Classification

Ratio of
VotingRightsOwned(%)

Relationship

Address

StatedCapital Business or(Millions Occupationof yen)Zephyrus Tokutei
Minato-ku,
Mokuteki Kaisha
Tokyo(Note 3)

Investment
manage0.1
ment
business--

Nishi Tokutei
Minato-ku,
Mokuteki Kaisha
Tokyo(Note 3)0.1

Investment
managementbusiness

-

-

279

Investment
managementbusiness--

Danube Tokutei
Minato-ku,
Mokuteki Kaisha
Tokyo(Note 3)0.1

Investment
managementbusiness--

Nagahoribashi
Holding Tokutei

82

Investment
manage-

-

-

Name

Interested partyof the AssetManager
Shijodori Holding
Tokutei Mokuteki Minato-ku,
KaishaTokyo(Note 3)

Minato-ku,
Tokyo

36

Common Business
Board RelationMember
shipType ofTransaction

Transaction
Amount(Thousandsof yen)(Note 1)

Seller of Purchase of
trust
trust
benefibeneficiary
ciary
14,878,412
interests ininterests
real estate
in real(Note 2)
estate(Note 5)Seller of Purchase of
trust
trust
benefibeneficiary
ciary interests in real 4,473,000
interests
estatein real(Note 2)
estate(Note 5)Seller of Purchase of
trust
trust
benefibeneficiary
ciary interests in real 7,594,980
interests
estatein real(Note 2)
estate(Note 5)Seller of Purchase of
trust
trust
benefibeneficiary
ciary interests in real 3,845,400
interests
estatein real(Note 2)
estate(Note 5)Seller of Purchase of
2,514,820
trust
trust

Account

Balance atthe End of
the Period(Thousandsof yen)(Note 1)

-

-

-

-

-

-

-

-

-

-

Mokuteki Kaisha(Note 3)(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)mentbusiness

Aki Tokutei
Minato-ku,
Mokuteki Kaisha
Tokyo(Note 3)0.1

Investment
managementbusiness--

MyStays HotelManagement
Co., Ltd.
(Note 3)

100

Hotel
business--

Minato-ku,
Tokyobenefibeneficiary
ciary interests in realinterests
estatein real(Note 2)
(Note 5)
estateSeller of Purchase of
trust
trust
benefibeneficiary
ciary interests in realinterests
estatein real(Note 2)
estate(Note 5)LesseeandRentaloperator
revenuesof hotels

6,631,968--

1,722,789

Accounts
receivables

540,064

Consumption taxes are not included in transaction amounts, but are included in the balance at the end of the period.
The terms and conditions have been determined based on the Asset Manager’s internal rules and manual regarding transactions with thesponsor company.
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 nocapital relationship with the Asset Manager to be disclosed. The Tokutei Mokuteki Kaisha or the lessee and operator have received ananonymous 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 theequivalent of interested party.
Calliope holds 609,942 units (holding ratio: 22.85%) of the issued investment units of INV.
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 notincluded.

Property
NumberName of Property

Counterparty

D3

Hotel MyStays Kyoto-Shijo

Shijodori Holding Tokutei Mokuteki
Kaisha6,024,460

D4

MyStays Shin-Urayasu ConferenceCenterZephyrus Tokutei Mokuteki Kaisha

4,930,200

D5Hotel MyStays Maihama

Zephyrus Tokutei Mokuteki Kaisha

4,870,312

D6

Hotel Vista Premio Dojima

Danube Tokutei Mokuteki Kaisha

3,845,400

D7

Hotel MyStays Nagoya-Sakae

Zephyrus Tokutei Mokuteki Kaisha

2,958,000

D8Hotel MyStays Sakaisuji-Honmachi

Nagahoribashi Holding Tokutei
Mokuteki Kaisha

2,514,820

D9

Hotel MyStays Yokohama

Zephyrus Tokutei Mokuteki Kaisha

2,119,900

D10

Hotel MyStays Nippori

D11

Hotel MyStays Fukuoka-TenjinMinami

D12

Purchase Price (Thousands of yen)

Nishi Tokutei Mokuteki Kaisha

1,898,540

Shijodori Holding Tokutei Mokuteki
Kaisha1,570,520

Flexstay Inn Iidabashi

Aki Tokutei Mokuteki Kaisha

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

Total

2.

39,938,580

Transactions with Affiliates

37None for both the fiscal period ended June 30, 2014 and the fiscal period ended December 31, 2014
3.

Transactions with Companies under Common Control
None for both the fiscal period ended June 30, 2014 and the fiscal period ended December 31, 2014

4.

Transactions with Directors and Major Unitholders
Fiscal period ended June 30 (from January 1, 2014 to June 30, 2014)

Classification

Directors andclose
relatives

Same asabove(Note 1)
(Note 2)
(Note 3)Name

Business or occupation

Naoki
FukudaExecutive Director of theInvestment Corporation
and President & CEO of
Consonant Investment
Management Co., Ltd.

Same asabove

Same as above

Account

Balance atthe End of
the Period(thousandsof yen)(Note 3)

Ratio ofvoting rights

Details of transaction

Transaction
amount(thousands ofyen)(Note 3)-

Payment of asset
management fees toConsonant Investment
Management Co., Ltd.
(Note 1)126,083

Tradeand otherpayables

68,670-

Payment of generaladministration fees fororganizational
management toConsonant Investment
Management Co., Ltd.
(Note 2)

600

Trade
and otherpayables324

Naoki Fukuda served as a representative of the third party (the Asset Manager), and the fee is as set forth in the Articles of Incorporation of theInvestment Corporation.
Naoki Fukuda served as a representative of the third party (the Asset Manager), and the fee is as set forth in the agreement, “General
Administrative Agreement relating to Organizational Management, between the Investment Corporation and the Asset Manager.
Consumption taxes are not included in transaction amounts, but are included in the balance of the end of the period.

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

Classification

Directors andclose
relatives

Same asabove(Note 1)
(Note 2)
(Note 3)Name

Business or occupation

Naoki
FukudaExecutive Director of theInvestment Corporation
and President & CEO of
Consonant Investment
Management Co., Ltd.

Same asabove

Same as above

Account

Balance atthe End of
the Period(thousandsof yen)(Note 3)

Ratio ofvoting rights

Details of transaction

Transaction
amount(thousands ofyen)(Note 3)-

Payment of asset
management fees toConsonant Investment
Management Co., Ltd.
(Note 1)

128,993Tradeand otherpayables

67,500-

Payment of generaladministration fees fororganizational
management toConsonant Investment
Management Co., Ltd.
(Note 2)

1,100

Trade
and otherpayables864

Naoki Fukuda served as a representative of the third party (the Asset Manager), and the fee is as set forth in the Articles of Incorporation of theInvestment Corporation.
Naoki Fukuda served as a representative of the third party (the Asset Manager), and the fee is as set forth in the agreement, “General
Administrative Agreement relating to Organizational Management, between the Investment Corporation and the Asset Manager.
Consumption taxes are not included in transaction amounts, but are included in the balance of the end of the period.

38

(Notes Related to Per Unit Information)

Net assets per unit

Fiscal Period ended
June 30, 2014
(from January 1, 2014 toJune 30, 2014)
23,121 yen

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)
23,005 yen

Net income per unit

573 yen

762 yen

Net income per unit is calculated by dividing net income for the period by the daily weighted average number of investment
units issued and outstanding. Diluted net income per unit is not stated as there are no diluted units.
(Note)The basis for calculating net income per unit is as follows.

Net income for the fiscal period (thousands of yen)Amounts not attributable to common unit holders(thousands of yen)
Net income attributable to common unit holders(thousands of yen)
Average number of investment units during the period(units)Fiscal Period ended
June 30, 2014
(from January 1, 2014 toJune 30, 2014)
901,815

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)
1,958,002--

901,815

1,958,002

1,573,179

2,570,932(Significant Subsequent Events)
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)LenderBorrowing amountInterest rate, etc.
Interest payment date

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

Borrowing method: In accordance with the “Individual Loan Agreement” dated February 4, 2015. Secured(Note 1) / with no guarantee: February 6, 2015
: February 6, 2018

Borrowing date
Maturity Date

(Note 1) First priority pledges over three real estate properties, Apa Hotel Yokohama-Kannai, Hotel Nets Hakodate and Flexstay Inn Shirogane; andthe real estate trust beneficiary interests for 65 properties, Nisshin Palacestage Daitabashi, Nisshin Palacestage Higashi-Nagasaki, Growth
Maison Gotanda, Growth Maison Kameido, Emerald House, Harmonie Ochanomizu, Suncrest Shakujii Koen, Growth Maison ShinYokohama, 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 6Jo, Spacia Ebisu, Kindai Kagakusha Building, Lexington Plaza Nishigotanda, Cross Square NAKANO, Ohki Aoba Building, Lexington

39

Plaza Hachiman, AEON TOWN Sukagawa, Hotel MyStays Kanda, Hotel MyStays Asakusa, Hotel MyStays Kyoto-Shijo, MyStays ShinUrayasu 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 real estate
properties, Shinjuku Island and Times Kanda-Sudacho 4th.

2. Acquisition of Assets
INV decided to acquire the following 3 properties (total acquisition price of JPY 13,261 million) on February 4, 2015, andcompleted the acquisition of all of the 3 properties on February 6, 2015.
Property number: D21 Name of property: Apa Hotel Yokohama-Kannai
Acquisition Date
Acquisition Price (Note )Location
Construction Date
Category of Assets
SellerTotal Floor Area
Total Leasable Area

February 6, 2015
JPY8,350 million
3-37-2, Sumiyoshi-cho, Naka-ku, Yokohama-shi, Kanagawa
April 2005
Trust Beneficiary Interest
AYK Tokutei Mokuteki Kaisha
6,568.51m2
6,568.51m2

Property number: D22 Name of property: Hotel Nets Hakodate
Acquisition Date
Acquisition Price (Note )Location
Construction Date
Category of Assets
SellerTotal Floor Area
Total Leasable Area

February 6, 2015
JPY2,792 million
26-17, Motomachi, Hakodate-shi, Hokkaido
February 2008
Trust Beneficiary Interest
Zephyrus Tokutei Mokuteki Kaisha
7,961.26m2
7,961.26m2

Property number: D23 Name of property: Flexstay Inn Shirogane
Acquisition Date
Acquisition Price (Note )Location
Construction Date
Category of Assets
SellerTotal Floor Area
Total Leasable Area
(Note)

February 6, 2015
JPY2,119 million
5-10-15, Shirokane, Minato-ku, Tokyo
December 1984
Trust Beneficiary Interest
Nishi Tokutei Mokuteki Kaisha
1,754.06m2
1,754.06m2

Acquisition price is based on the purchase price indicated in the relevant purchase agreement and does not include acquisition costs,
property taxes, city planning taxes and consumption taxes, etc.

(9)Changes in Number of Investment Units Issued and Outstanding

Changes in the number of investment units issued and outstanding and unitholders’ equity from the date of establishment to
the end of the reporting period are as follows.
Date

Type of Issue

December 26, 2003

Private placement
for incorporation
Private placement

January 18, 2002

Number of Investment Units
Issued and Outstanding (units)
Increase
Total

Unitholders’ Equity (yen)Increase

Total

Reference

400

400

200,000,000

200,000,000(Note 1)

2,700

3,100

1,012,500,000

1,212,500,000(Note 2)January 9, 2004

Private Placement

1,350

4,450

506,250,000

1,718,750,000(Note 2)January 21, 2003

Private placement

1,333

5,783

499,875,000

2,218,625,000(Note 2)January 27, 2004

Private placement

267

6,050

100,125,000

2,318,750,000(Note 2)40

January 28, 2004

Private placement

800

6,850

300,000,000

2,618,750,000(Note 2)January 31, 2004

Private placement266

February 5, 2004

Private placement

800

7,116

99,750,000

2,718,500,000(Note 2)

7,916

300,000,000

3,018,500,000(Note 2)February 7, 2004

Private placement

1,333

9,249

499,875,000

3,518,375,000(Note 2)

May 17, 2004

Public offering

9,000

18,2493,377,250,000

6,895,625,000(Note 3)February 7, 2005

Public offering

10,65028,8993,937,667,100

10,833,292,100(Note 4)

July 31, 2006

Public offering

25,00053,8998,301,125,000

19,134,417,100(Note 5)February 1, 2010

Unit split

215,596

269,495-

19,134,417,100(Note 6)

February 1, 2010

MergerThird-party
allotment
Third-party
allotment
Public offering

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)

July 29, 2011
December 20, 2013
July 16, 2014
August 13, 2014

Third-party
allotment(Note 1)

INV 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(Note 3)New investment units were issued in a public offering at a price of 395,000 per unit (375,250) yen after deducting the underwriters’(Note 4)

discount) to raise funds for the acquisition of new properties.
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’(Note 5)

discount) to raise funds for the acquisition of new properties.
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’(Note 6)

An investment unit slit of 5 units per 1 unit was conducted.

(Note 7)A merger by absorption pursuant to Article 147 of the Act on Investment Trusts and Investment Corporations was conducted with LCP,

properties.

discount) to raise funds for the acquisition of new properties.

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 per unit 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 per unit for the purpose of cash reserve to appropriate
to repayment in future borrowings.

4. Change in Directors
Changes in directors are disclosed in a timely manner upon the determination of such changes.

41

5. Reference Information(1)

Composition of INV’s Assets

Type of
Purpose

Geographic area

asset

(Note 1)

Previous Period(as of June 30, 2014)
Ratio of total
Amount held
assets(millions of yen)
(Note 2)Current Period(as of December 31, 2014)
Ratio of total
Amount held
assets(millions of yen)
(Note 2)(%)(%)

Greater Tokyo
－

－

－

－

－

－

－

－

－

－

－

－

712

0.9

710

0.5

－

－

－

－

712

0.9

710

0.5

100

0.1

100

0.1

－

－

－

－

100

0.1

100

0.1

－

－

－

－

－

－

－

－

－
813

－
1.0

－
811

－
0.6

43,90955.4

43,71533.5

11,96515.1

11,853

9.1

55,874

70.5

55,569

42.6

7,106

9.0

7,083

5.4

6,037

7.6

5,982

4.6

13,143

16.6

13,066

10.0

－

－

－

－

－

－

－

－

－

－

－

－

5,532

7.0

27,266

20.9－－

18,029

13.8

5,532

7.0

45,296

34.7

Total real estate in trust

74,55094.1

113,932

87.3

Deposits and other assets

3,898

4.9

15,733

12.1

79,261100.0

130,477

100.0(75,363)(95.1)(114,743)(87.9)

Residential

Office/RetailRealestatearea
Major regional
citiesSubtotal
Greater Tokyo
area
Major regional
citiesSubtotal
Greater Tokyo
area

Hourly parking, etc Major regional
citiesSubtotal
Greater Tokyo
area
Major regionalHotelcitiesSubtotal
Total real estate
Greater Tokyo
area
Major regional
Residential
citiesSubtotal
Greater Tokyo
area
Major regional
Office/RetailcitiesSubtotal
RealGreater Tokyo
estate in
area
trust
Major regional
Hourly parking, etc cities
Subtotal

HotelGreater Tokyo
area
Major regional
citiesSubtotal

Total assets (Note 3)42

(Note 1)(Note 2)
(Note 3)

Greater Tokyo area refers to Tokyo, Kanagawa Prefecture, Chiba Prefecture and Saitama Prefecture.
“Amount held” is from the balance sheet as of the end of the reporting period and is calculated by deducting accumulated depreciationfrom the acquisition price (including acquisition related costs).
The figure indicated in“()” in “Total assets” shows the amount related to actual owned real estate.

Previous Period(as of June 30, 2014)

Current Period(as of December 31, 2014)

Amount (millions of yen) Ratio to total assets (%) Amount (millions of yen) Ratio to total assets (%)
Total Liabilities

42,88754.1

69,084

52.9

Total Net Assets
Total Liabilities and Net

36,37345.9

61,39247.1

79,261100.0

130,477

100.0

Assets43

(2)Real Estate Properties
The following summarizes the real estate and real estate held in trust that INV held as of December 31, 2014.

aProperty
number(Note 1)Price and investment ratio

Name of property

BalanceAcquisition
Investment Appraisal value as
priceof December 31,
sheet
ratio (%)
2013
Type of (millions of carrying
yen)(millions of yen)value
ownership(Note 3) (millions of (Note 4)(Note 5)yen)

Location (Note 2)

Trust
A26

Nisshin Palacestage Daitabashi

1-31-2 Izumi, Suginami Ward, Tokyo

beneficiary

1,251

1,139

1.1

1,150 (Note 6)

1,229

1,112

1.0

1,250 (Note 6)

888

842

0.8

949 (Note 6)

1,070

1,007

0.9

1,080 (Note 6)

1,505

1,409

1.3

1,240 (Note 6)

1,428

1,373

1.2

1,310 (Note 6)

1,088

1,064

0.9

1,030 (Note 6)

1,059

989

0.9

1,140 (Note 6)

1,023

977

0.9

972 (Note 6)

906

849

0.8

937 (Note 6)

825

772

0.7

859 (Note 6)

795

761

0.7

691 (Note 6)

interests
Trust
A27

Nisshin
Palacestage
NagasakiHigashi-

5-4-1 Nagasaki, Toshima Ward, Tokyo

beneficiaryinterests
Trust

A28

Growth Maison Gotanda

2-26-6 Nishi-Gotanda, Shinagawa Ward,beneficiaryTokyo
interests
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 Takanodai, Nerima Ward, Tokyo

beneficiaryinterests
Trust

A33

Growth Maison Shin-Yokohama

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

beneficiaryinterests
Trust

A34

Belle Face Ueno-Okachimachi

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

beneficiaryinterests
Trust

A35

Grand Rire Kameido

3-39-12 Kameido, Koto Ward, Tokyo

beneficiaryinterests
Trust

A36

Growth Maison Ikebukuro3-31-14 Nishi-Ikebukuro, Toshima Ward,beneficiaryTokyo
interests
Trust

A37

Growth Maison Yoga

1-15-15 Okamoto, Setagaya Ward, Tokyo

beneficiaryinterests

44

Property
number(Note 1)Name of property

BalanceAcquisition
Investment Appraisal value as
priceof December 31,
sheet
ratio (%)
2013
Type of (millions of carrying
yen)(millions of yen)value
ownership4)(Note(Note 3) (millions of(Note 5)yen)

Location (Note 2)

Trust
A38

Route Tachikawa

3-7-6 Nishikicho, Tachikawa City, Tokyo

beneficiary

676

650

0.6

606 (Note 6)

651

655

0.6

604 (Note 6)

646

646

0.5

467 (Note 6)

620

566

0.5

699 (Note 6)

604

616

0.5

553 (Note 6)

589

569

0.5

511 (Note 6)

589

570

0.5

582 (Note 6)

572

543

0.5

508 (Note 6)

566

528

0.5

565 (Note 6)

557

527

0.5

458 (Note 6)

510

474

0.4

509 (Note 6)

2,520

2,392

2.1

2,860 (Note 7)

3,260

3,113

2.8

3,630 (Note 8)

1,880

1,876

1.6

2,280 (Note 8)interests
Trust
A39

Shibuya-Honmachi Mansion

2-35-2 Honmachi, Shibuya Ward, Tokyo

beneficiaryinterests
Trust

A40

City Heights Kinuta

4-13-15 Kinuta, Setagaya Ward, Tokyo

beneficiaryinterests
Trust

A41

A42

Acseeds Tower KawaguchiNamiki

Capital Heights Kagurazaka

2-5-13 Namiki, Kawaguchi City, Saitama
Prefecture

beneficiaryinterests
Trust

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

beneficiaryinterests
Trust

A45

Wacore Tsunashima I

2-7-47 Tarumachi, Kohoku-ku, Yokohama
City, Kanagawa Prefecture

A46

Foros Nakamurabashi

beneficiaryinterests
Trust

1-6-6 Koyama, Nerima Ward, Tokyo

beneficiaryinterests
Trust

A47

Growth Maison Kaijin

5-29-51 Kaijin, Funabashi City, Chiba
Prefecture

A48

College Square Machiya

beneficiaryinterests
Trust

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,beneficiaryTokyo
interests
Trust

A53

Nishiwaseda Cresent Mansion

3-18-9 Nishi-Waseda, Shinjuku Ward,beneficiaryTokyo
interests

45

Property
number(Note 1)Name of property

BalanceAcquisition
Investment Appraisal value as
priceof December 31,
sheet
ratio (%)
2013
Type of (millions of carrying
yen)(millions of yen)value
ownership4)(Note(Note 3) (millions of(Note 5)yen)

Location (Note 2)

Trust
A54

Lexington Square Akebonobashi

3-8 Yochomachi, Shinjuku Ward, Tokyo

beneficiary

1,450

1,368

1.2

1,630 (Note 9)

1,070

990

0.9

1,020 (Note 7)

866

826

0.7

985 (Note 7)

577

556

0.5

659 (Note 8)

970

893

0.8

1,090 (Note 9)

1,110

1,039

0.9

1,300 (Note 7)

415

396

0.4

503 (Note 7)

330

303

0.3

441 (Note 7)

255

238

0.2

252 (Note 9)

977

898

0.8

1,070 (Note 9)

511

464

0.4

566 (Note 9)interests
Trust
A56

Casa Eremitaggio

1-14-15 Nakane, Meguro Ward, Tokyo

beneficiaryinterests
Trust

A59

Towa City Coop Shinotsuka II

5-49-7 Higashi-Ikebukuro, Toshima Ward,beneficiaryTokyo
interests
Trust

A61

Bichsel Musashiseki

1-22-7 Sekimachi-Kita, Nerima Ward,beneficiaryTokyo
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
City, Kanagawa Prefecture

beneficiaryinterests
Trust

A64

Royal Park Omachi

2-11-10 Omachi, Aoba-ku, Sendai City,
beneficiary
Miyagi Prefectureinterests
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,
beneficiary
Aichi Prefectureinterests
Trust

A71

Lexington Square Daitabashi

1-33-8 Izumi, Suginami Ward, Tokyo

beneficiaryinterests
Trust

A72

Lexington Square Honjo
Azumabashi

4-20-6 Higashikomagata, Sumida Ward,beneficiaryTokyo
interests

46

Property
number(Note 1)Name of property

BalanceAcquisition
Investment Appraisal value as
price
of
sheet
ratio (%)
Type of(millions of carrying
December 31, 2013ownershipyen)(millions of yen)
value
(Note 3) (millions of (Note 4)(Note 5)yen)

Location (Note 2)

Trust
A73

AMS TOWER Minami 6-Jo

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

1,180

1,043

1.0

1,130 (Note 9)

7,010

6,657

5.9

7,230 (Note 7)

1,660

1,649

1.4

1,800 (Note 7)

1,260

1,239

1.1

1,340 (Note 7)

973

956

0.8

1,040 (Note 7)

674

662

0.6

732 (Note 7)

657

646

0.6

743 (Note 7)

625

615

0.5

695 (Note 7)

608

598

0.5

666 (Note 7)

597

587

0.5

674 (Note 7)

595

585

0.5

641 (Note 7)

581

569

0.5

674 (Note 7)

544

537

0.5

603 (Note 7)

543

537

0.5

593 (Note 7)

interests
Trust
A75

Spacia Ebisu

3-6-22 Higashi, Shibuya Ward, Tokyo

beneficiaryinterests
Trust

A76

Neo Prominence

3-21-5 Shimo, Kita Ward, Tokyo

beneficiaryinterests
Trust

A77

Invoice Shin-Kobe Residence

3-3-8 Ikutacho Chuo Ward, Kobe City,
beneficiary
Hyogo Prefectureinterests
Trust

A78

Cosmo Court Motomachi

3-12-20 Motomachi Dori Chuo Ward,beneficiary
Kobe City, Hyogo Prefectureinterests
Trust

A79

Revest Honjin

2-13 Torii Dori Nakamura Ward, Nagoya
City, Aichi Prefecture

A80

Revest Matsubarainterests
Trust

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

A81

Sun Terrace Minami Ikebukuro

beneficiary

beneficiaryinterests
Trust

2-22-6 Minami Ikebukuro, Toshima Ward,beneficiaryTokyo
interests
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,beneficiary
Nagoya City, Aichi Prefectureinterests
Trust

A84

Revest Heian

2-13-17 Heian, Kita Ward, Nagoya City,
beneficiary
Aichi Prefectureinterests
Trust

A85

Vendir Hamaotsu Ekimae

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

beneficiary

Prefecture

A86

Salvo Sala

interests
Trust

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

A87

Excellente Kagurazaka

beneficiaryinterests
Trust128-1 Yamabukicho Shinjuku
Tokyo, and other one parcel

Ward,

beneficiaryinterests

47

Property
number(Note 1)Name of property

BalanceAcquisition
Investment Appraisal value as
price
of
sheet
ratio (%)
Type of(millions of carrying
December 31, 2013ownershipyen)(millions of yen)
value
(Note 3) (millions of (Note 4)(Note 5)yen)

Location (Note 2)

Trust
A88

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

Luna Court Edobori

beneficiary

525

516

0.4

565 (Note 7)

512

502

0.4

560 (Note 7)

456

451

0.4

528 (Note 7)

446

440

0.4

491 (Note 7)

412

408

0.3

476 (Note 7)

374

370

0.3

414 (Note 7)

373

368

0.3

397 (Note 7)

355

352

0.3

397 (Note 7)

335

333

0.3

399 (Note 7)

331

325

0.3

344 (Note 7)

310

309

0.3

364 (Note 7)

297

293

0.3

323 (Note 7)

58,08355,56949.3

60,775

1,301

1,239

1.1

1,040 (Note 6)

715

710

0.6

574 (Note 8)interests
Trust
A89

7-2-2 Motomachi Dori, Chuo Ward, Kobe

Winntage Kobe Motomachi

City, Hyogo Prefecture

A90

Queen's Court Fukuzumi

beneficiaryinterests
Trust

1-3-10 Fukuzumi, Koto Ward, Tokyo

beneficiaryinterests

380-1 Kawaranomachi, Higashinotoin
A91

Dori Nijo Kudaru, Chukyo Ward, Kyoto

Corp Higashinotoin

City, Kyoto Prefecture, and other twoparcels

Trustbeneficiaryinterests
Trust

A92

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

Belair Oimachi

beneficiaryinterests
Trust

A93

3-18 Minami Tsukaguchimachi,
Amagasaki City, Hyogo Prefecture

Siete Minami-Tsukaguchi

beneficiaryinterests
Trust

A94

A95

Prime Life Sannomiya Isogami

4-3-23 Isogamidori ,Chuo Ward, Kobe

Koen

City Hyogo Prefecture

HERMITAGE NANBA WEST

interests
Trust

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

A96

Century Park Shinkawa 1-bankan

beneficiary

beneficiaryinterests
Trust

4-1-2 Shinkawamachi Minato Ward,
Nagoya City, Aichi Prefecture

beneficiaryinterests
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

A99

Prime Life Mikage

beneficiaryinterests
Trust

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

beneficiaryinterests

Subtotal (63 properties)

-

Trust
B8

Kindai Kagakusha Building

2-7-15, Ichigaya Tamachi, Shinjuku Ward,beneficiaryTokyo
interests
6-5-1 Nishi-Shinjuku, Shinjuku Ward,

B9

Shinjuku Island

Real estate
Tokyo

48

Property
number(Note 1)Name of property

BalanceAcquisition
Investment Appraisal value as
price
of
sheet
ratio (%)
Type of(millions of carrying
December 31, 2013ownershipyen)(millions of yen)
value
(Note 3) (millions of (Note 4)(Note 5)yen)

Location (Note 2)

Trust
B14

Lexington Plaza Nishigotanda

5-2-4 Nishigotanda, Shinagawa Ward,Tokyo

beneficiary

4,880

4,776

4.1

4,010 (Note 7)

1,060

1,067

0.9

944 (Note 7)

816

757

0.7

659 (Note 9)

3,280

3,163

2.8

3,440 (Note 8)

2,320

2,061

2.0

2,250 (Note 8)

14,372

13,77712.2

12,917

97

100

0.1

107 (Note 6)

97

100

0.1

107

2,851

2,891

2.4

3,280 (Note 7)

2,584

2,608

2.2

3,290 (Note 7)

6,024

5,997

5.1

8,010 (Note 7)

4,930

4,905

4.2

5,260 (Note 7)

4,870

4,846

4.1

5,080 (Note 7)

3,845

3,834

3.3

4,300 (Note 7)

2,958

2,929

2.5

3,040 (Note 7)

2,514

2,508

2.1

3,250 (Note 7)

interests
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
Trust

B18

AEON TOWN Sukagawa

105 Furukawa, Sukagawa City, Fukushima
beneficiary
Prefectureinterests
Subtotal (7 properties)-

1-22-7, 1-22-15 Kanda sudacho, Chiyoda
C1Times Kanda-Sudacho 4thReal estate
Ward, Tokyo
Subtotal (1 properties)

-

Trust
D1

Hotel MyStays Kanda

1-2-2 Iwamotocho, Chiyoda Ward, Tokyo

beneficiaryinterests
Trust

D2

Hotel MyStays Asakusa

1-21-11 Honjyo, Sumida Ward, Tokyo

beneficiaryinterests
Trust

D3

Hotel MyStays Kyoto-shijo

52, Kasaboko-cho, Higashiiru,
Aburanokoji, Shijyo-dori, Shimogyo,
Kyoto-shi, Kyoto Prefecture

beneficiaryinterests
Trust

D4

MyStays Shin-Urayasu Conference 2-1-4, Akemi, Urayasu-shi, Chiba
CenterPrefecture

beneficiaryinterests
Trust

D5

Hotel MyStays Maihama

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

beneficiaryinterests
Trust

D6

Hotel Vista Premio Dojima

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

beneficiaryinterests
Trust

D7

Hotel MyStays Nagoya-Sakae

2-23-22, Higashisakura, Naka-ku, Nagoya,beneficiary
Aichi Prefectureinterests
Trust

D8

Hotel MyStays SakaisujiHonmachi

1-4-8, Awaji-machi, Chuo-ku, Osaka-shi,
Osaka Prefecture

beneficiaryinterests

49

Property
number(Note 1)Name of property

BalanceAcquisition
Investment Appraisal value as
price
of
sheet
ratio (%)
Type of(millions of carrying
December 31, 2013ownershipyen)(millions of yen)
value
(Note 3) (millions of (Note 4)(Note 5)yen)

Location (Note 2)

Trust
D9

4-81, Sueyoshi-cho, Naka-ku, Yokohamashi, Kanagawa

Hotel MyStays Yokohama

beneficiary

2,119

2,108

1.8

2,590 (Note 7)

1,898

1,891

1.6

2,140 (Note 7)

1,570

1,567

1.3

1,740 (Note 7)

1,381

1,382

1.2

1,560 (Note 7)

1,331

1,326

1.1

1,540 (Note 7)

1,242

1,242

1.1

1,510 (Note 7)

1,242

1,244

1.1

1,420 (Note 7)

1,192

1,189

1.0

1,370 (Note 7)

1,192

1,192

1.0

1,600 (Note 7)

749

750

0.6

821 (Note 7)

589

591

0.5

647 (Note 7)

283

286

0.2

311 (Note 7)

Subtotal (20 properties)

45,37345,29638.5

52,759-Total (91 properties)

117,927

114,743

100.0

126,558-

interests
Trust
D10

5-43-7, Higashi-Nippori, Arakawa-ku,
Tokyo

Hotel MyStays Nippori

beneficiaryinterests
Trust

D11

Hotel MyStays Fukuoka-TenjinMinami

3-14-20, Haruyoshi, Chuo-ku, Fukuokashi, Fukuoka Prefecture

beneficiaryinterests
Trust

D12

Flexstay Inn Iidabashi

3-26, Shin-Ogawa-cho, Shinjuku-ku,
Tokyobeneficiaryinterests
Trust

D13

Hotel MyStays Ueno Inaricho

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

beneficiaryinterests
Trust

D14

Flexstay Inn Shinagawa

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

D17

Hotel MyStays Otemae

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

D18

Flexstay Inn Kiyosumi Shirakawa 1-12-16, Tokiwa, Koto-ku, Tokyo

beneficiaryinterests
Trust

D19

Flexstay Inn Nakanobu P1

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

beneficiaryinterests
Trust

D20

Flexstay Inn Nakanobu P2

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

beneficiaryinterests

50

(Note 1)(Note 2)
(Note 3)(Note 4)(Note 5)

“Property number” indicates the categorization of properties acquired by INV according to use, with “A” for residential, “B” for office and retail,“C” for parking lots and “D” for hotel, and a number assigned for each property. The number following “A”, “B”, “C” and “D” is assigned
based on how early the acquisition was made, except that for acquisitions made at the same time the number is assigned based on how large theacquisition price was.
“Location” is in principle based on the indicated address (jyukyohyoji), except that if the jyukyohyoji system has not been implemented for suchproperty, the location is based on the land number (banchi).
“Acquisition price” is the purchase price indicated in the real estate or trust beneficiary purchase agreement. Such price excludes consumption
taxes and has been rounded down to the nearest hundred million yen.
“Investment ratio” is the ratio of the acquisition price to the aggregate acquisition price of INV’s portfolio, and has been rounded to one decimal
place.
“Appraisal value as of December 31, 2013” is the value appraised or researched by the real estate appraiser 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. The real estate appraisers
are as follows.
Real estate appraiser(Note 6)

Asset Research and Development Inc.

(Note 7) Japan Real Estate Institute(Note 8) Morii Appraisal & Investment Consulting Inc(Note 9) Tanizawa Sogo Appraisal Co., Ltd.

b

Capital expenditures for assets under management(a) Schedule for capital expenditures
The schedule for the principal capital expenditures for property maintenance construction etc. as of the end of the fiscal
period for the real estate assets is as follows.
Estimated Cost (Thousands of yen)
Name of Property

Location

Scheduled Time of

Purpose

Implementation

Payment for
Total

the Fiscal
PeriodNisshin
A26

Palacestage
Daitabashi

A32

B15

B16

B16

D06

SuginamiIntercom renovation

Ward, Tokyo

work

Suncrest Shakujii-

Nerima Ward,

Koen

Tokyo

Cross

SquareNAKANO
Ohki

Aoba

Building
Ohki
BuildingTokyo

the 8th – 10th floors

SendaiCity,

MiyagiSendai

Maintenance

City,

Work corresponding
to a tenant on the

Prefecture

6th floor

Osaka

Renewal work on
storagebatteryequipmentofto June 2015
From May 2015 toJune 2015

Miyagi

DojimaMyStayswork

on exterior walls

Osaka-shi,

OtemaeJune 2015

Renovation work on From February 2015

Hotel Vista Premio

Hotel

From June 2015 toNakano Ward,

Installation
D17

power

generators

Prefecture
Aoba

June 2015

Renewal work on
backupFrom June 2015 to

From April 2015 toApril 2015
From April 2015 toApril 2015

wireless local area From April 2015 toOsaka

network for guest

51

Payments

5,303

―

―

8,824

―

―

8,100

―

―

40,000

―

―

5,000

―

―

9,140

―

―

7,200

―

―

a

Osaka-shi,

rooms

Advance

April 2015

(b) 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
December 31, 2014 is as follows. Capital expenditures for the fiscal period was 116,923 thousand yen, and together with
29,710 thousand yen of repair cost included in this fiscal period’s expenses, construction work totaling 146,633 thousand yen
was implemented.
Name of Property

Location

PurposeSuginami

Renewal work on prepaid hot

Ward, Tokyo

water units

Nishiwaseda

Shinjuku

Maintenance

Cresent Mansion

Ward, Tokyo

miscellaneous drainage pipe

Nisshin
A26

Palacestage
Daitabashi

A53

A64

B8

B16

Royal

Park

OmachiSendaiCity,

Miyagiworkon

Renewal work on air conditioning

Renewal work on air conditioning

Building

Ward, TokyosystemBuilding

SendaiCity,

Miyagi

From December
2014 to December

6,258

From September
2014 to December

28,080From December
2014 to December

4,500

From September
2014 to October

15,5732014

Maintenance work on electricalinstallations

Prefecture

yen)

2014

Shinjuku

Aoba

Implementation

2014

Kindai Kagakusha

Ohki

Payment (Thousands of2014

systemPrefectureTime of

From December
2014 to December

3,605

2014

Other construction

58,907
Total

116,923(c) 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 maintenancerepairs in the medium to long term future in accordance with the long-term maintenance plan for each property.

Fiscal period

19th Fiscal

20th Fiscal

21st Fiscal

22nd Fiscal

23rd Fiscal

PeriodPeriodPeriodPeriodPeriodFrom July 1,
2012 toDecember 31,
2012

Reserved funds at beginning of
periodAmount reserved (Note)
Amount reversed (Note)
Amount carried over for next
fiscal period

From January
1, 2013 to June30, 2013

From July 1,
2013 toDecember 31,
2013

From January 1, From July 1, 20142014 to June 30, to December 31,
2014

2014

487,561

541,609571,543524,730

579,682

thousand yen

thousand yen

thousand yen

thousand yen

thousand yen

151,076

165,233

165,271

199,177

268,495

thousand yen

thousand yen

thousand yen

thousand yen

thousand yen

97,028135,298

212,084

144,225

109,812thousand yen

thousand yen

thousand yen

thousand yen

thousand yen

541,609571,543524,730

579,682

738,365

thousand yen

thousand yen

thousand yen

thousand yen

thousand yen

52

(Note)c

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

Condition of income, etc. (From July 1, 2014 to December 31, 2014)(Unit: Thousands of yen)
Total ofrental-Total ofrentalrevenue
Property(i)

Property NameNo.

related
Rent,
commonarea fees

Facility
Other
incomeexpenses(ii)

Depreciation

Tax andInsurance
management other public expenses
feechargesOtherexpensesProfitandexpenses

Loss

(iii)

((i)-(ii))NOI((i)-(ii)+(iii))

A26

Nisshin Palacestage Daitabashi

38,66635,4283,238

19,147

7,308

1,596

65

2,273

7,903

19,51927,422

A27

Nisshin Palacestage HigashiNagasaki

45,82841,254

4,574

23,622

6,738

2,678

90

1,825

12,28922,20634,495A28

Growth Maison Gotanda

27,376

26,772

604

8,339

2,121

1,325

31

510

4,350

19,03623,387A29

Growth Maison Kameido

30,41029,017

1,392

14,168

5,065

1,686

42

1,459

5,914

16,241

22,156

A30

Emerald House

41,741

38,9202,821

19,107

5,899

2,565

93

762

9,786

22,63332,420

A31

Harmonie Ochanomizu

35,263

32,9552,308

17,817

5,269

1,851

64

3,516

7,115

17,446

24,561

A32

Suncrest Shakujii-Koen

36,34433,446

2,898

15,167

3,821

3,138

93

817

7,295

21,17728,472A33

Growth Maison Shin-Yokohama

33,31730,512

2,804

15,478

3,658

2,403

65

3,260

6,090

17,83823,929A34

Belle Face Ueno-Okachimachi

30,191

29,924267

12,621

4,901

1,667

41

655

5,355

17,56922,925

A35

Grand Rire Kameido

26,61926,619

-

8,240

499

1,708

44

500

5,487

18,37923,867A36

Growth Maison Ikebukuro

24,272

22,712

1,559

10,801

2,804

1,057

38

1,647

5,253

13,471

18,724A37

Growth Maison Yoga

21,746

20,252

1,493

9,497

2,820

1,362

39

1,327

3,948

12,24816,196

A38

Route Tachikawa

20,942

19,380

1,561

8,300

2,394

1,067

38

743

4,056

12,642

16,698

A39

Shibuya-Honmachi Mansion

19,94719,027

920

7,921

4,017

919

33

789

2,161

12,025

14,187

A40City Heights Kinuta

17,664

17,027

637

4,570

1,371

976

33

643

1,545

13,093

14,639A41

Acseeds Tower Kawaguchi-Namiki

23,651

21,706

1,945

11,167

2,991

1,126

36

1,973

5,038

12,484

17,522

A42

Capital Heights Kagurazaka

18,24917,791

458

8,297

3,658

1,079

36

1,317

2,205

9,951

12,157

A43

College Square Machida

18,26818,268

-

5,051

430

1,508

28

500

2,584

13,21615,801

A44

Belair Meguro16,195

15,330

865

5,859

1,854

859

21

811

2,313

10,336

12,649A45

Wacore Tsunashima I

18,002

16,812

1,190

9,977

3,625

894

29

1,534

3,893

8,025

11,918

A46

Foros Nakamurabashi

17,954

16,405

1,549

9,047

3,001

985

33

659

4,367

8,907

13,274A47

Growth Maison Kaijin

21,294

19,384

1,909

15,620

5,929

2,076

79

1,294

6,240

5,673

11,914

A48

College Square Machiya

14,706

14,706

-

5,016

-

939

27

500

3,549

9,689

13,239A51

City House Tokyo Shinbashi

88,38382,967

5,415

39,32015,027

4,902

106

6,191

13,09249,06362,156

A52

Winbell Kagurazaka

103,227

96,432

6,794

36,229

8,793

6,277

138

5,216

15,803

66,99882,801

A53

Nishiwaseda Cresent Mansion

68,082

63,561

4,520

23,561

10,804

3,540

99

2,523

6,594

44,52051,115

A54

Lexington Square Akebonobashi

45,511

43,4172,094

18,552

5,053

2,183

55

2,633

8,625

26,95935,584

A56

Casa Eremitaggio

30,38027,881

2,499

16,387

4,143

1,689

43

1,467

9,043

13,99323,037

A59

Towa City Coop Shinotsuka II

33,30732,128

1,179

11,282

3,670

1,379

49

1,500

4,684

22,02526,709A61

Bichsel Musashiseki

22,012

21,334

678

8,447

3,579

1,171

44

1,106

2,544

13,565

16,109A62

Lexel Mansion Ueno Matsugaya

33,16730,2052,961

15,000

3,476

1,892

54

1,303

8,272

18,167

26,439A63

Towa City Coop Sengencho

54,72649,3755,350

30,351

17,433

3,002

99

2,359

7,456

24,374

31,831

A64

Royal Park Omachi

24,18821,515

2,673

12,666

5,996

1,591

57

918

4,102

11,521

15,624

A65

Lexington Square Haginomachi

18,42816,545

1,883

8,008

2,320

1,148

36

952

3,550

10,42013,970

A66

Visconti Kakuozan

11,318

10,225

1,092

6,831

3,037

904

21

1,112

1,756

4,486

6,243

A71

Lexington Square Daitabashi

27,913

26,6301,282

14,944

3,157

1,546

40

2,196

8,002

12,96920,972

A72

Lexington
Azumabashi

17,226

16,260

965

9,278

2,031

810

29

1,507

4,900

7,947

12,847

A73

AMS TOWER Minami 6-Jo

45,81442,782

3,032

31,246

6,538

6,443

112

4,029

14,123

14,567

28,691

A75

Spacia Ebisu

187,027

169,834

17,19368,924

14,270

8,701

225

8,805

36,921

118,103

155,024

A76

Neo Prominence

61,481

52,443

9,038

27,947

11,826

3,519

114

2,489

9,997

33,53443,531

A77

Invoice Shin-Kobe Residence

48,843

46,202

2,640

21,342

4,232

2,743

67

2,847

11,451

27,50038,952

A78

Cosmo Court Motomachi

33,40532,526879

17,827

3,822

2,306

65

1,660

9,972

15,57725,550

A79

Revest Honjin

29,80527,837

1,968

14,362

3,514

1,787

57

1,603

7,398

15,442

22,841

A80

Revest Matsubara

27,73526,005

1,730

13,256

3,101

1,858

52

1,268

6,975

14,47821,453

A81

Sun Terrace Minami Ikebukuro

20,27718,0172,260

11,210

3,242

905

28

2,176

4,857

9,067

13,925

A82

Alba Noritake Shinmachi

25,53922,984

2,555

14,949

4,506

1,730

52

1,778

6,880

10,59017,471

SquareHonjo

53

Total ofrental-Total ofrentalrevenue
Property
Property Name

(i)

No.

related
Rent,
commonarea fees

Facility
Other
incomeexpenses(ii)

Depreciation

Tax andInsurance
management other public expenses
feechargesOtherexpensesProfitandexpenses

Loss

(iii)

((i)-(ii))NOI((i)-(ii)+(iii))

A83

Revest Meieki Minami

25,521

24,143

1,378

13,537

3,554

1,652

55

1,395

6,879

11,983

18,862

A84

Revest Heian

24,56022,877

1,682

12,393

3,697

1,403

38

894

6,359

12,167

18,526

A85

Vendir Hamaotsu Ekimae

29,67527,732

1,943

14,857

4,962

1,950

62

924

6,958

14,81821,776

A86

Salvo Sala

23,253

22,345908

11,523

3,147

1,572

43

1,315

5,444

11,73017,174

A87

Excellente Kagurazaka

16,934

16,325

609

8,230

2,181

778

26

1,049

4,194

8,704

12,899A88

Luna Court Edobori

19,122

18,182940

10,243

2,912

1,175

33

1,057

5,064

8,879

13,943

A89

Winntage Kobe Motomachi

22,20021,845354

11,597

2,529

1,587

41

1,633

5,805

10,603

16,408

A90

Queen's Court Fukuzumi

16,24815,786

461

6,643

1,852

761

23

811

3,195

9,604

12,799

A91

Corp Higashinotoin

16,872

16,210

662

7,717

2,164

905

29

827

3,790

9,154

12,944

A92

Belair Oimachi

13,875

13,230

645

6,785

2,044

661

20

1,383

2,675

7,089

9,764

A93

Siete Minami-Tsukaguchi

16,217

15,368

849

8,356

2,768

983

28

1,335

3,240

7,861

11,101

A94

Prime Life Sannomiya Isogami Koen

14,36013,929

431

6,539

1,588

846

22

655

3,426

7,821

11,24754

Rentalrevenue

Property
No.

Property Name
(i)

Rent,
commonarea fees

ProfitandLeasingrelated

Facility
Tax andInsurance
expenses management other public expenses(ii)
fee
charges

Other
incomeOther
expenses

Depreciation
expenses
(iii)

Loss

NOI
((i)-(ii)+(iii))((i)-(ii))

A95

HERMITAGE NANBA WEST

15,512

14,533

979

7,585

2,027

1,018

26

1,115

3,398

7,927

11,325

A96

Century Park Shinkawa 1-bankan

18,07015,122

2,947

7,798

2,397

885

38

644

3,833

10,271

14,105

A97

West Avenue

11,510

11,234

275

6,082

1,751

561

21

813

2,935

5,427

8,363

A98

Little River Honmachibashi

12,75812,677

80

7,070

2,256

942

23

1,087

2,760

5,687

8,448

A99

Prime Life Mikage

11,98011,908

72

6,200

1,568

761

19

891

2,960

5,779

8,740

B8

Kindai Kagakusha Building

35,40531,481

3,923

24,536

8,851

4,403

69

1,002

10,208

10,86921,077

B9

Shinjuku Island(Note1)(Note1)(Note1)(Note1)(Note1)(Note1)(Note1)(Note1)(Note1)(Note1)(Note1)

B14

Lexington Plaza Nishigotanda

138,450

121,650

16,80070,112

29,615

12,732

184

1,175

26,403

68,33894,742

B15

Cross Square NAKANO

32,30926,592

5,717

15,737

7,005

3,851

79

991

3,810

16,572

20,382

B16

Ohki Aoba Building

40,39732,1598,237

24,168

11,433

4,016

97

840

7,780

16,22824,009

B17

Lexington Plaza Hachiman

167,597

131,345

36,252

85,111

51,838

11,554155

756

20,80582,486103,292

B18

AEON TOWN Sukagawa

142,505

142,505-

94,25256,124

7,876

192

621

29,43848,252

77,690C1

Times Kanda-Sudacho 4th

2,453

2,453

-

253

-

252

-

-

1

2,200

2,201

D1

Hotel MyStays Kanda

104,832

104,832-

16,162

-

-

71

504

15,58588,669104,255

D2

Hotel MyStays Asakusa

108,407108,407-

17,288

-

-

35

511

16,741

91,119107,860

D3

Hotel MyStays Kyoto-Shijo (Note2)

310,661

310,661-

42,276

-

-

196

462

41,617

268,384

310,002

D4

MyStays Shin-Urayasu ConferenceCenter (Note2)

217,607

217,607-37,358

-

-

176

461

36,720180,249

216,969

D5

Hotel MyStays Maihama (Note2)

166,812

166,812-32,068

-

-

86

462

31,519134,744

166,263

D6

Hotel Vista Premio Dojima (Note2)

160,910

160,910-

40,797

7,501

-

243

465

32,587

120,113

152,700

185,561

185,561-

55,244

15,686

-

210

464

38,883130,317

169,200

D7
D8

Hotel
MyStays
Nagoya-Sakae(Note2)
Hotel MyStays Sakaisuji-Honmachi(Note2)

123,501

123,501-

17,815

-

-

94

461

17,259105,685

122,945

D9

Hotel MyStays Yokohama (Note2)

124,297

124,297-

21,569

-

-

172

462

20,934

102,728

123,662

D10

Hotel MyStays Nippori (Note2)

72,782

72,782-

14,178

-

-

52

461

13,66558,60372,268

D11

Hotel MyStays
Minami (Note2)

90,32690,326-

12,843

-

-

84

461

12,29877,482

89,780

D12

Flexstay Inn Iidabashi (Note2)

55,56455,564

-

8,314

-

-

80

461

7,772

47,24955,022

D13

Hotel MyStays(Note2)50,42350,423-

11,838

-

-

38

461

11,33838,58549,923

D14

Flexstay Inn Shinagawa (Note2)

44,932

44,932

-

6,348

-

-

31

461

5,855

38,58444,439

D15

Flexstay Inn Tokiwadai (Note2)

57,136

57,136

-

6,295

-

-

72

461

5,761

50,84156,603

D16

Flexstay Inn Sugamo (Note2)

50,35450,354-

10,601

-

-

58

461

10,08139,752

49,834

D17

Hotel MyStays Otemae (Note2)

74,45074,450

-

8,735

-

-

98

461

8,175

65,71573,890

D18

Flexstay Inn Kiyosumi Shirakawa(Note2)

36,62936,629

-

7,036

-

-

69

461

6,505

29,59336,098

D19

Flexstay Inn Nakanobu P1 (Note2)

21,911

21,911

-

4,062

-

-

22

461

3,578

17,84821,427

D20

Flexstay Inn Nakanobu P2 (Note2)

12,157

12,157

-

1,924

-

-

13

461

1,450

10,232

11,683

4,610,717

4,408,874

201,843

1,586,854

460,196

163,789

6,084

119,524

837,259

3,023,863

3,861,122

Total(Note 1)
(Note 2)

Fukuoka-Tenjin-

Ueno

Inaricho

Not disclosed because the consent of the tenant was not obtained.
These eighteen properties were acquired as of July 17, 2014, the operation period of which is from July 17, 2014 to December 31, 2014.

55

(3)

Tenant SummaryaSummary of lease conditions by property(As of December 31, 2014)
RentalLeasable Area

Leased Area

2

2

LeasableUnits(units)(Note 3)

Revenue

LeasedUnits Number of(units)tenants(Note 4)

Ratio of
Rental(Thousands of Revenue
(%)
yen)

Type of
Lease (Note7)

Property
No

Property Name

A26

Nisshin Palacestage Daitabashi

1,771.13

1,594.14

98

88

1 Best Property Corporation

38,666

0.8

Pass throughmaster lease

A27

Nisshin Palacestage HigashiNagasaki

2,681.94

2,583.97

60

58

1 Best Property Corporation

45,828

1.0

Pass throughmaster lease

27,376

0.6

Pass throughmaster lease(m )(Note 1)(m )(Note 2)Tenants (Note 5)(Note 6)

Pacific Development &A28

Growth Maison Gotanda

1,051.50

1,051.50

48

48

1 Management

A29

Growth Maison Kameido

1,367.96

1,179.56

66

57

1 Mitsui Home Estate Co., Ltd.

30,410

0.7

Pass throughmaster lease

A30

Emerald House

2,152.31

2,108.79

96

94

1 Tokyo Gakusei Life Co., Ltd.

41,741

0.9

Pass throughmaster lease35,2630.8

Pass throughmaster lease

36,344

0.8

Pass throughmaster lease

33,317

0.7

Pass throughmaster lease

Co., Ltd

Pacific Development &A31

Harmonie Ochanomizu

1,748.24

1,635.36

65

61

1 Management

A32

Suncrest Shakujii-Koen

3,029.16

2,937.72

29

28

1 Mitsui Home Estate Co., Ltd.

Co., Ltd.

Pacific Development &A33

Growth Maison Shin-Yokohama

1,858.44

1,776.08

68

65

1 Management

A34

Belle Face Ueno-Okachimachi

1,351.11

1,328.77

64

63

1 Mainichicomnet Co., Ltd.

30,191

0.7

Pass throughmaster lease

A35

Grand Rire Kameido

1,562.26

1,562.26

72

72

1 J.S.B. Co., Ltd.

26,6190.6

Fixed rentmaster lease

A36

Growth Maison Ikebukuro

952.89862.174238

124,272

0.5

Pass throughmaster lease

A37

Growth Maison Yoga

1,015.34

963.8239

37

1 Mitsui Home Estate Co., Ltd.

21,746

0.5

Pass throughmaster lease

20,942

0.5

Pass throughmaster lease

19,947

0.4

Pass throughmaster lease

Co., Ltd

Pacific Development & Management
Co., Ltd

Pacific Development &A38

Route Tachikawa

1,368.57

1,322.13

24

23

1 Management
Co., Ltd
Pacific Development &A39

Shibuya-Honmachi Mansion

1,167.50

1,065.70

25

22

1 Management

A40

City Heights Kinuta

1,235.93

1,235.93

19

19

1 Mitsui Home Estate Co., Ltd.

17,664

0.4

Pass throughmaster lease

A41

Acseeds Tower KawaguchiNamiki

1,210.74

1,041.14

57

49

1 Access Group, Inc.

23,651

0.5

Pass throughmaster lease

A42

Capital Heights Kagurazaka

1,126.65

1,032.23

26

23

1 Mitsui Home Estate Co., Ltd.

18,2490.4

Pass throughmaster lease

A43

College Square Machida

1,047.75

1,047.75

62

62

1 Mainichicomnet Co., Ltd.

18,268

0.4

Fixed rentmaster lease

A44

Belair Meguro

557.05490.6925

22

116,195

0.4

Pass throughmaster lease

18,002

0.4

Pass throughmaster lease

Co., Ltd

Pacific Development & Management
Co., Ltd
Pacific Development & Management

A45

Wacore Tsunashima I

907.46816.185045

1Co., Ltd

A46

Foros Nakamurabashi

815.77724.1337

33

1 Mitsui Home Estate Co., Ltd.

17,954

0.4

Pass throughmaster lease

A47

Growth Maison Kaijin

2,040.27

1,815.94

34

30

1 Mitsui Home Estate Co., Ltd.

21,294

0.5

Pass throughmaster lease

A48

College Square Machiya

871.35871.3543

43

1 Mainichicomnet Co., Ltd.

14,706

0.3

Fixed rentmaster lease

A51

City House Tokyo Shinbashi

3,364.00

3,216.68

86

82

1 Mitsui Home Estate Co., Ltd.

88,383

1.9

Pass throughmaster lease56

RentalLeasable Area
Property
No

Property Name

2(m )(Note 1)

Leased Area
2(m )(Note 2)

LeasableUnits(units)(Note 3)

Revenue

LeasedUnits Number of(units)tenants(Note 4)

Tenants (Note 5)

Ratio of
Rental(Thousands of Revenue
(%)
yen)

Type of
Lease (Note
7)(Note 6)
A52

Winbell Kagurazaka

4,032.70

4,032.70

118

118

1 Mitsui Home Estate Co., Ltd.

A53

Nishiwaseda Cresent Mansion

4,310.77

3,901.52

69

63

1

103,227

2.2

Pass throughmaster lease

68,082

1.5

Pass throughmaster lease

45,511

1.0

Pass throughmaster lease30,380

0.7

Pass throughmaster lease

Pacific Development & Management
Co., Ltd
A54

Lexington Square Akebonobashi

1,987.88

1,765.25

88

78

1 Mitsui Home Estate Co., Ltd.

A56

Casa Eremitaggio

1,197.19

1,091.45

17

14

1

Pacific Development & Management
Co., Ltd
A59

Towa City Coop Shinotsuka II

1,627.13

1,485.46

58

53

1 Mitsui Home Estate Co., Ltd.

33,307

0.7

Pass throughmaster lease

A61

Bichsel Musashiseki

1,220.24

1,047.41

70

60

1 Mitsui Home Estate Co., Ltd.

22,012

0.5

Pass throughmaster lease

A62

Lexel Mansion Ueno Matsugaya

1,969.45

1,907.04

29

28

1

33,167

0.7

Pass throughmaster lease54,726

1.2

Pass throughmaster lease

Pacific Development & Management
Co., Ltd
Pacific Development & Management
A63

Towa City Coop Sengencho

3,426.36

2,748.43

154

123

1

A64

Royal Park Omachi

1,929.59

1,699.72

51

47

1 One-Eyed Capital Advisers

24,188

0.5

Pass throughmaster lease

A65

Lexington Square Haginomachi

1,528.58

1,528.58

39

39

1 One-Eyed Capital Advisers

18,428

0.4

Pass throughmaster lease

A66

Visconti Kakuozan

705.75632.968

7

1 Mitsui Home Estate Co., Ltd.

11,3180.2

Pass throughmaster lease

Co., Ltd

57

RentalLeasable Area
Property
No

Property Name

2(m )(Note 1)

Leased Area
2(m )(Note 2)

LeasableUnits(units)(Note 3)

Revenue

LeasedUnits Number of(units)tenants(Note 4)

Tenants (Note 5)

Ratio of
Rental(Thousands of Revenue
(%)
yen)

Type of
Lease (Note
7)(Note 6)
A71

Lexington Square Daitabashi

1,430.64

1,218.10

43

37

1 Nisshin Jyutaku Support K.K.

27,913

0.6

Pass throughmaster lease784.74761.5033

32

1 Nisshin Jyutaku Support K.K.

17,226

0.4

Pass throughmaster lease

45,814

1.0

Pass throughmaster lease

187,027

4.1

Pass throughmaster lease

Lexington Square Honjo
A72
Azumabashi
A73

AMS TOWER Minami 6-Jo

4,460.56

3,731.37

120

99

1 Big Service Co., Ltd.

A75

Spacia Ebisu

7,794.91

7,298.51

109

103

1

Pacific Development & Management
Co., LtdA76

Neo Prominence

3,574.70

3,358.15

52

48

1 Goodworks Co., Ltd.

61,481

1.3

Pass throughmaster lease

A77

Invoice Shin-Kobe Residence

2,773.71

2,607.22

81

76

1 Sohgoh Real Estate

48,843

1.1

Pass throughmaster lease

A78

Cosmo Court Motomachi

2,310.49

2,000.39

82

71

1 Global Community Co., Ltd

33,405

0.7

Pass throughmaster lease

A79

Revest Honjin

1,933.80

1,789.26

80

74

1 Mininet, Inc

29,805

0.6

Pass throughmaster lease

A80

Revest Matsubara

1,955.40

1,832.43

70

66

1 Mininet, Inc

27,735

0.6

Pass throughmaster lease

A81

Sun Terrace Minami Ikebukuro

898.70827.7538

35

1 Goodworks Co., Ltd.

20,277

0.4

Pass throughmaster lease

A82

Alba Noritake Shinmachi

1,731.68

1,635.28

64

60

1 Mininet, Inc

25,5390.6

Pass throughmaster lease

A83

Revest Meieki Minami

1,634.60

1,560.02

61

58

1 Mininet, Inc

25,521

0.6

Pass throughmaster lease

A84

Revest Heian

1,554.03

1,554.0340

40

1 Mininet, Inc

24,560

0.5

Pass throughmaster lease

A85

Vendir Hamaotsu Ekimae

2,670.66

2,332.27

8170

1 Mininet, Inc

29,675

0.6

Pass throughmaster lease

A86

Salvo Sala

1,428.12

1,335.94

54

50

1 Daygran, Inc.

23,253

0.5

Pass throughmaster lease

A87

Excellente Kagurazaka

701.92619.6933

29

1 Goodworks Co., Ltd.

16,934

0.4

Pass throughmaster lease

A88

Luna Court Edobori

1,185.50

1,044.08

50

44

1 Nihon Housing Co., Ltd.

19,122

0.4

Pass throughmaster lease

A89

Winntage Kobe Motomachi

1,433.35

1,358.78

57

54

1 Global Community Co., Ltd.

22,200

0.5

Pass throughmaster lease

A90

Queen's Court Fukuzumi

765.18707.7725

23

1 Goodworks Co., Ltd.

16,248

0.4

Pass throughmaster lease

A91

Corp Higashinotoin

1,029.05

956.0842

39

1 Global Community Co., Ltd.

16,872

0.4

Pass throughmaster lease

A92

Belair Oimachi

530.60492.8026

24

1 Goodworks Co., Ltd.

13,875

0.3

Pass throughmaster lease

A93

Siete Minami-Tsukaguchi

1,020.86

995.3640

39

1 Goodworks Co., Ltd.

16,217

0.4

Pass throughmaster lease

A94

Prime Life Sannomiya Isogami
Koen

789.12764.4632

31

1 Global Community Co., Ltd.

14,360

0.3

Pass throughmaster lease

A95

HERMITAGE NANBA WEST

992.76992.7621

21

1 Daygran, Inc.

15,512

0.3

Pass throughmaster lease

A96

Centurybankan1,477.62

1,410.49

44

42

1 Goodworks Co., Ltd.

18,070

0.4

Pass throughmaster lease

A97

West Avenue

794.80675.5840

34

1 Joint Property Co., Ltd.

11,510

0.2

Pass throughmaster lease

A98

Little River Honmachibashi

974.81914.1531

29

1 Goodworks Co., Ltd.

12,7580.3

Pass throughmaster lease

A99

Prime Life Mikage

761.18710.1828

26

1 Global Community Co., Ltd.

11,980

0.3

Pass throughmaster lease

B8

Kindai Kagakusha Building

1,451.54

1,451.54

13

13

1 Sohgoh Real Estate

35,4050.8

B9

Shinjuku Island

526.43526.431

11(Note 8)(Note 8)Park

Shinkawa

1-(Note 8)Pass throughmaster lease
Directvariable rent
lease
(Note 9)Variable rent

B14

Lexington Plaza Nishigotanda

6,033.58

6,033.58

11

11

8 Community One Co., Ltd.

B15

Cross Square NAKANO

2,145.00

1,378.46

45

23

1

B16

Ohki Aoba Building

2,178.41

2,178.41

13

13

1 Tozai Asset Management Co., Ltd.

58

Shin-ei Real Estate Business Co.,Ltd.

138,450

3.0

32,3090.7

40,3970.9

lease(Note 10)
Pass throughmaster lease
Fixed rentmaster lease

RentalLeasable Area
Property
No

Property Name

2(m )(Note 1)

Leased Area
2(m )(Note 2)

LeasableUnits(units)(Note 3)

LeasedUnits Number of(units)tenants(Note 4)

Revenue

Tenants (Note 5)

Ratio of
Rental(Thousands of Revenue
(%)
yen)

Type of
Lease (Note
7)(Note 6)
B17

Lexington Plaza Hachiman

8,419.15

8,419.15

18

18

1 Tokyo Biso Kogyo Corporation

167,597

3.6

Pass throughmaster lease

B18

AEON TOWN Sukagawa

18,440.58

18,440.58

1

1

1 Aeon Town Co., Ltd.

142,505

3.1

Fixed rentmaster lease

C1

Times Kanda-Sudacho 4-th

81.04

81.04

1

1

1 Times24. Co., Ltd.

2,453

0.1

Direct fixed
rent lease(Note 11)59

RentalLeasable Area
Property
No

Property Name

2(m )(Note 1)

Leased Area
2(m )(Note 2)

LeasableUnits(units)(Note 3)

LeasedUnits Number of(units)Tenants(Note 4)

Revenue

Tenants (Note 5)

Ratio of
Rental(Thousands of Revenue
(%)
yen)

Type of
Lease (Note
7)(Note 6)
D1

Hotel MyStays Kanda

2,585.72

2,585.72

126

126

MyStays Hotel Management Co.,
1
Ltd.

D2

Hotel MyStays Asakusa

3,327.38

3,327.38

160

160

1

MyStays Hotel Management Co.,Ltd.

108,407

D3

Hotel MyStays Kyoto-Shijo

7,241.51

7,241.51

224

224

1

MyStays Hotel Management Co.,Ltd.

310,661

D4

MyStaysShin-Urayasu
Conference Center

6,232.30

6,232.30

175

175

1

MyStays Hotel Management Co.,Ltd.

217,607

D5

Hotel MyStays Maihama

2,456.36

2,456.36

90

90

1

MyStays Hotel Management Co.,Ltd.

166,812

D6

Hotel Vista Premio Dojima

9,445.32

9,445.32

141

141

1

MGH Master Lease Kabusiki
Kaisha160,910

D7

Hotel MyStays Nagoya-Sakae

9,064.71

9,064.71

270

270

1

Yugen Kaisha Nagoya HotelManagement

185,561

D8

Hotel
MyStays
Honmachi

4,188.83

4,188.83

190

190

1

MyStays Hotel Management Co.,Ltd.

123,501

D9

Hotel MyStays Yokohama

7,379.43

7,379.43

190

190

1

MyStays Hotel Management Co.,Ltd.

124,297

D10

Hotel MyStays Nippori

1,719.29

1,719.29

93

93

1

MyStays Hotel Management Co.,Ltd.

72,782

D11

Hotel MyStays Fukuoka-TenjinMinami

3,412.71

3,412.71

177

177

1

MyStays Hotel Management Co.,Ltd.

90,326

D12

Flexstay Inn Iidabashi

2,953.38

2,953.38

59

59

1

MyStays Hotel Management Co.,Ltd.

55,564

D13

Hotel MyStays Ueno Inaricho

1,150.76

1,150.76

72

72

1

MyStays Hotel Management Co.,Ltd.

50,423

D14

Flexstay Inn Shinagawa

1,134.52

1,134.52

55

55

1

MyStays Hotel Management Co.,Ltd.

44,932

D15

Flexstay Inn Tokiwadai

2,539.75

2,539.75

129

129

1

MyStays Hotel Management Co.,Ltd.

57,136

D16

Flexstay Inn Sugamo

2,089.86

2,089.86

104

104

1

MyStays Hotel Management Co.,Ltd.

50,354

D17

Hotel MyStays Otemae

4,956.66

4,956.66

110

110

1

MyStays Hotel Management Co.,Ltd.

74,450

D18

Flexstay
Shirakawa

2,673.64

2,673.64

55

55

1

MyStays Hotel Management Co.,Ltd.

36,629Inn

Sakaisuji-

Kiyosumi

60

104,832

Fixed rent
plus variable
2.3 rent type
operation(Note 12)
Fixed rent
plus variable
2.4 rent type
operation(Note 12)
Fixed rent
plus variable
6.7
rent type
operation(Note 12)
Fixed rent
plus variable
4.7
rent type
operation(Note 12)
Fixed rent
plus variable
3.6
rent type
operation(Note 12)
Fixed rent,
variable rent
plus pass
3.5
throughmaster lease(Note 13)
Fixed rent
plus variable
4.0
rent type
operation(Note 12)
Fixed rent
plus variable
2.7
rent type
operation(Note 12)
Fixed rent
plus variable
2.7
rent type
operation(Note 12)
Fixed rent
plus variable
1.6
rent type
operation(Note 12)
Fixed rent
plus variable
2.0
rent type
operation(Note 12)
Fixed rent
plus variable
1.2
rent type
operation(Note 12)
Fixed rent
plus variable
1.1
rent type
operation(Note 12)
Fixed rent
plus variable
1.0
rent type
operation(Note 12)
Fixed rent
plus variable
1.2
rent type
operation(Note 12)
Fixed rent
plus variable
1.1
rent type
operation(Note 12)
Fixed rent
plus variable
1.6
rent type
operation(Note 12)
Fixed rent
plus variable
0.8
rent type
operation(Note 12)

RentalLeasable Area
Property
No

Property Name

2(m )(Note 1)

Leased Area
2(m )(Note 2)

LeasableUnits(units)(Note 3)

LeasedUnits Number of(units)Tenants(Note 4)

Revenue

Tenants (Note 5)

Ratio of
Rental(Thousands of Revenue
(%)
yen)

Type of
Lease (Note
7)(Note 6)
D19

Flexstay Inn Nakanobu P1

770.56770.5639

39

MyStays Hotel Management Co.,
1
Ltd.

D20

Flexstay Inn Nakanobu P2

391.49391.4922

22

1

MyStays Hotel Management Co.,Ltd.

12,157

224,574.36

215,812.28

5,997

5,708

98

－

4,610,717

Total

21,911

Fixed rent
plus variable
0.5
rent type
operation(Note 12)
Fixed rent
plus variable
0.3
rent type
operation(Note 12)100.0－(Note 1)

“Leasable Area” is based on the portion of each property or property in trust owned by INV and leasable as residential, office, retail etc.

(Note 2)

“Leased Area” is the portion of leasable area for which there is actually a lease agreement and is based on the area indicated in the leaseagreements.

(Note 3)

“Leasable Units” is the number of units possible to lease for each property or property in trust.

(Note 4)

“Leased Units” is the number of units actually leased to tenants and end-tenants based on lease agreements.

(Note 5)“Tenant” is the master lessee where there is a master lease agreement between INV or the trustee and a master lease company, and theprincipal lessee where there are direct lease agreements with end-tenants.

(Note 6)

“Rental Revenue” is the aggregate rent revenue for each property for the fiscal period, rounded down to the nearest thousand yen.

(Note 7)

Pursuant to pass through master lease agreements between the master lease company and the trustee, the master lease company pays theamount paid by end-tenants pursuant to subleases. Pursuant to fixed rent master lease agreements, the master lease company pays fixed
rent.

(Note 8)Not disclosed because the consent of the tenant was not obtained.

(Note 9)A direct lease agreement has been entered into between INV and the tenant (without using a master lease company), and rent is received
from the end tenant pursuant thereto.

(Note 10) A direct lease agreement has been entered into between the trustee and the tenant (without using a master lease company), and rent isreceived from the end tenant pursuant thereto.
(Note 11) A direct lease agreement has been entered into between INV and the tenant (without using a master lease company).The lease is fixed rent
regardless of use or occupancy conditions.
(Note 12) A direct lease agreement has been entered into between INV and the tenant. The lease is a fixed rent plus variable rent type operation
where, in addition to the fixed rent, a variable rent is established that allows the total rent to be varied based on the GOP (Gross Operating
Profit) attained under the hotel operations of the tenant.
(Note 13) The lease is fixed rent, variable rent plus pass-through master lease type operation where the pass-through rent the tenant receives from the
sub-tenant is added to the fixed rent and the variable rent based on the GOP attained under the operations of the tenant.

61

bOccupancy trend(Unit: %)19 Fiscal
Period20 Fiscal
Period21 Fiscal
Period22nd Fiscal
PeriodAs of theend ofAs ofthe endof

As of
the endof

As of
the endof

As of
the end
of

As of
the
end ofAs ofthe endof

As of
the endof

As of
the endofDec. 2012

Jun. 2013

Dec. 2013

Jun. 2014

Jul. 2014

Aug. 2014

Sept. 2014

Oct. 2014

95.0

94.1

90.1

92.0

91.0

91.9

th

Property
No.

Property Namest

18 Fiscal
Periodththnd

23 Fiscal Period

Jun.2012
A26
A27

Nisshin
Palacestage
Daitabashi
Nisshin
Palacestage
Higashi-Nagasaki

95.8

96.9

98.0

90.0

90.3

98.4

97.4

97.7

95.8

97.2

96.3

93.3

95.1

96.3

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

84.7

86.2

87.7

86.2

100.0

100.0

99.0

98.0

81.8

83.1

87.0

93.5

97.0

97.0

97.0

97.0

97.0

86.9

89.7

91.2

94.0

95.6

95.6

A29

Growth Maison Kameido

95.4

94.0

94.0

89.3

89.3

90.8

90.8

A30

Emerald House

100.0

99.0

100.0

98.9

100.0

100.0

100.0

A31

Harmonie Ochanomizu

96.1

100.0

88.2

97.5

91.2

87.1

87.1

A32

Suncrest Shakujii-Koen

97.1

94.7

95.6

95.3

97.0

97.0

94.1

98.5

97.1

94.1

86.9

A34

91.0

Dec. 2014

97.8

Growth Maison Gotanda

Growth Maison ShinYokohama
Belle
Face
UenoOkachimachi

Nov. 2014

As of theend of

100.0

A28

A33

As of theend of

100.0

98.4

100.0

100.0

98.3

98.3

100.0

100.0

100.0

98.3

98.3

A35

Grand Rire Kameido

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

A36

GrowthIkebukuro

90.5

90.6

88.2

97.6

90.4

88.0

90.4

90.4

95.3

95.3

90.5

A37

Growth Maison Yoga

92.4

92.2

97.3

100.0

97.3

89.7

92.4

92.4

92.4

92.4

94.9

A38

Route Tachikawa

67.9

100.0

76.7

83.5

96.6

100.0

96.6

96.6

96.6

96.6

96.6

A39

Shibuya-Honmachi
Mansion

96.5

100.0

80.8

96.4

100.0

100.0

98.1

95.9

94.0

89.3

91.3

A40

City Heights Kinuta

94.6

89.2

94.6

94.6

100.0

100.0

100.0

100.0

100.0

100.0

100.0

94.8

100.0

93.0

96.5

93.0

91.2

92.9

91.2

85.9

82.4

86.0

A41
A42

MaisonAcseeds
Tower
Kawaguchi-Namiki
CapitalHeights
Kagurazaka

84.4

92.5

97.2

91.0

90.5

94.4

97.2

94.4

94.4

94.4

91.6

A43

College Square Machida

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

A44

Belair Meguro

87.9

92.1

96.0

92.1

100.0

100.0

100.0

100.0

92.0

87.9

88.1

A45

Wacore Tsunashima I

84.2

96.1

90.0

82.1

94.1

94.1

96.0

94.1

92.1

89.9

89.9

A46

Foros Nakamurabashi

92.6

100.0

92.0

94.5

100.0

97.5

97.5

95.1

95.1

92.6

88.8

A47

Growth Maison Kaijin

96.7

97.1

94.4

100.0

90.0

90.0

92.6

92.8

91.9

91.9

89.0

A48

College Square Machiya

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

A51

City
House
Shinbashi

93.0

90.8

100.0

100.0

94.5

93.1

94.8

92.3

93.4

94.9

95.6

A52

Winbell Kagurazaka

93.3

96.4

96.9

96.5

98.6

98.6

98.6

97.1

93.7

97.3

100.0

88.8

100.0

98.5

94.8

92.5

90.9

90.9

89.4

90.9

90.5

90.5

93.4

93.1

94.4

89.7

93.3

90.9

88.7

88.7

88.7

87.6

88.8

90.0

92.9

90.0

90.0

97.0

97.0

97.0

94.1

94.1

94.1

91.2

92.6

97.3

94.9

89.9

92.8

92.8

92.8

92.8

92.8

92.8

91.3

97.1

97.1

95.7

92.9

94.3

91.4

91.4

88.6

88.6

88.7

85.8

96.3

93.2

86.8

100.0

96.3

96.3

96.4

93.2

93.2

90.1

96.8

A53
A54

Nishiwaseda
MansionLexington
Akebonobashi

Tokyo

Cresent
SquareA56

Casa Eremitaggio

A59

Towa
City
Shinotsuka II

A61Bichsel Musashiseki

A62
A63

Coop

Lexel Mansion
Matsugaya
Towa
City
Sengencho

Ueno
Coop

89.8

94.3

94.9

90.5

89.1

87.2

83.4

83.4

80.8

80.2

80.2

A64

Royal Park Omachi

93.2

96.4

100.0

95.0

90.6

90.6

90.6

92.3

93.9

93.9

88.1

A65

Lexington
Haginomachi

100.0

100.0

100.0

97.4

97.4

100.0

94.8

100.0

100.0

100.0

100.0

A66

Visconti Kakuozan

100.0

88.6

100.0

100.0

100.0

100.0

100.0

89.7

100.0

100.0

89.7

97.9

95.1

95.1

93.7

90.9

90.9

85.1

80.9

80.9

80.9

85.1

90.9

100.0

93.9

100.0

96.9

87.8

84.8

87.8

94.1

97.0

97.0

88.6

90.0

88.2

97.1

91.8

87.9

87.9

85.4

82.5

86.9

83.7

97.1

92.2

90.2

89.2

90.0

92.7

90.1

89.9

91.5

89.4

93.6

96.6

96.6

88.9

88.9

90.5

97.3

97.3

93.9

93.9

A71
A72
A73

SquareLexington
SquareDaitabashi
Lexington Square Honjo
Azumabashi
AMS TOWER Minami
6-Jo

A75

Spacia Ebisu

A76

Neo Prominence

－

94.8

A77

Invoice
Residence

－

99.1

98.6

95.4

94.4

96.8

96.8

97.7

96.8

97.3

94.0

A78

Cosmo Court Motomachi

－

97.5

92.7

98.7

90.4

89.1

87.8

87.8

85.3

84.1

86.6

A79

Revest Honjin

－

93.8

98.8

93.7

95.0

92.5

90.0

92.5

92.5

93.7

92.5

A80

Revest Matsubara

－

91.9

95.7

98.8

91.2

89.4

89.4

89.4

92.4

93.7

93.7

－

100.0

97.4

97.4

89.5

86.8

81.6

81.6

89.5

86.8

92.1
94.4

A81
A82

Shin-Kobe

Sun Terrace Minami
Ikebukuro
Alba
Noritake
Shinmachi

－

98.6

93.8

96.5

91.7

89.6

89.6

90.9

90.9

91.6

A83

Revest Meieki Minami

－

97.0

100.0

98.5

93.6

98.5

96.6

98.5

97.0

93.9

95.4

A84

Revest Heian

－

95.2

100.0

98.4

98.4

98.4

98.4

96.8

96.8

98.4

100.0

62

th

Property
No.

Property Namest

19 Fiscal
Period20 Fiscal
Period21 Fiscal
Period22nd Fiscal
PeriodAs ofthe endof

As of
the endof

As of
the endof

As of
the end
of

As of
the
end ofAs ofthe endof

As of
the endof

As of
the endofDec. 2012

Jun. 2013

Dec. 2013

Jun. 2014

Jul. 2014

Aug. 2014

Sept. 2014

Oct. 2014th

18 Fiscal
PeriodAs of theend ofthnd

23 Fiscal Period

Jun.2012
Hamaotsu

As of theend ofNov. 2014

As of theend ofDec. 2014

A85

VendirEkimae

－

93.3

95.4

100.0

94.2

91.8

89.6

89.3

86.0

86.0

87.3

A86

Salvo Sala

－

89.9

98.0

96.7

91.5

91.0

93.7

95.2

93.5

93.5

93.5

A87

Excellente Kagurazaka

－

100.0

97.1

91.2

97.1

97.1

94.1

88.3

88.3

85.4

88.3

A88

Luna Court Edobori

－

96.0

98.0

98.0

88.1

88.1

86.1

84.1

86.1

90.1

88.1

A89

Winntage
Motomachi

－

98.2

94.9

86.0

91.1

89.3

91.2

93.1

94.8

92.9

94.8

A90

Queen's Court Fukuzumi

－

100.0

100.0

100.0

100.0

100.0

100.0

96.6

100.0

95.9

92.5

A91

Corp Higashinotoin

－

100.0

97.7

95.1

90.3

90.3

90.3

92.8

95.2

95.2

92.9

A92

Belair Oimachi

－

92.6

100.0

96.4

96.1

92.3

84.8

88.7

89.0

85.1

92.9

A93

Siete
Tsukaguchi

－

94.9

100.0

97.5

92.5

87.6

95.0

95.0

97.5

97.5

97.5

Kobe

Minami-

63

th

As of

PtoprtyNo.

Property Namethe end ofJun. 2012

A94
A95
A96

Prime Life Sannomiya
Isogami Koen
HERMITAGE
NANBA
WEST
Century Park Shinkawa 1bankan

A97

West Avenue

A98

LittleHonmachibashi

A99

Prime Life Mikage

B8

Kindai
Building

River

Kagakusha

19 Fiscal
PeriodAs of

20 Fiscal
PeriodAs of

21 Fiscal
PeriodAs of

22nd Fiscal
Period
As of

As of

As of

As of

As of

the endofthe endofthe endoftheend oftheend ofthe endofthe endofthe endofDec. 2012

Jun. 2013th

18 Fiscal
Periodst

stnd

22 Fiscal Period
As of

As of

the end of

the end of

Nov. 2014

Dec. 2014

Dec. 2013

Jun. 2014

Jul. 2014

Aug. 2014

Sept. 2014

Oct. 2014

100.0

100.0

93.8

100.0

96.9

96.9

96.9

96.9

96.9

96.9

－

91.2

86.9

96.0

92.0

87.7

92.0

96.0

96.0

96.0

100.0

－

100.0

90.9

97.7

100.0

100.0

97.7

100.0

95.4

97.7

95.5

－

90.0

82.5

90.0

85.0

85.0

80.0

82.5

82.5

85.0

85.0

－

96.9

93.8

96.9

93.9

93.9

93.9

93.8

93.8

93.8

93.8

－

85.5

100.0

96.6

93.4

96.7

96.7

100.0

96.6

93.3

93.3

85.5

100.0

100.0

100.0

95.0

95.0

95.0

95.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

92.0

100.0

90.1

90.1

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

B9

Shinjuku Island

B14

Lexington
Nishigotanda

B15

Cross Square NAKANO

54.0

54.2

57.6

67.6

64.3

64.3

65.9

64.3

64.3

64.3

64.3

B16

Ohki Aoba Building

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

B17

Lexington Plaza Hachiman

94.6

94.6

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

B18

AEON TOWN Sukagawa

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

Plaza

C1

Times Kanda-Sudacho 4th

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

C21

Bon
SejourFunabashi

100.0

100.0

100.0

100.0

－

－

－

－

－

－

－

C22

Bon Sejour Yotsugi

100.0

100.0

100.0

100.0

－

－

－

－

－

－

－

C23

Bon Sejour Hino

100.0

100.0

100.0

100.0

－

－

－

－

－

－

－

C24

Bon Sejour Musashi Shinjo

100.0

100.0

100.0

100.0

－

－

－

－

－

－

－

C25

Bon Sejour Komaki

100.0

100.0

100.0

100.0

－

－

－

－

－

－

－

C26

Bon
SejourShibusawa

100.0

100.0

100.0

100.0

－

－

－

－

－

－

－

C27

Bon Sejour Itami

100.0

100.0

100.0

100.0

－

－

－

－

－

－

－

D1

Hotel MyStays Kanda

－

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D2

Hotel MyStays Asakusa

－

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D3

Hotel MyStays Kyoto-Shijo

－

－

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

D4

MyStaysShin-Urayasu
Conference Center

－

－

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

D5

Hotel MyStays Maihama

－

－

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

D6

Hotel Vista Premio Dojima

－

－

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

－

－

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

D7
D8

ChitoseHadanoHotel MyStays NagoyaSakae
Hotel MyStays SakaisujiHonmachi

－

－

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

D9

Hotel MyStays Yokohama

－

－

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

D10

Hotel MyStays Nippori

－

－

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

D11

Hotel MyStays FukuokaTenjin-Minami

－

－

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

D12

Flexstay Inn Iidabashi

－

－

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

D13

Hotel
MyStays
Inaricho

－

－

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

D14

Flexstay Inn Shinagawa

－

－

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

D15

Flexstay Inn Tokiwadai

－

－

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

D16

Flexstay Inn Sugamo

－

－

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

D17

Hotel MyStays Otemae

－

－

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

D18

Flexstay Inn
Shirakawa

－

－

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

D19

Flexstay Inn Nakanobu P1

－

－

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

D20

Flexstay Inn Nakanobu P2

－

－

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

95.1

96.2

95.9

96.3

95.1

96.3

96.1

96.0

95.9

95.9

96.1

Ueno

Kiyosumi

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

[Distribution Policy]
INV conforms to the policies set out below with regards to cash distributions to unitholders or registered pledgees ofinvestment units listed or recorded in the registry of unitholders at the end of each fiscal period.

64aDistribution of Profits
Distributable amounts generated from management of INV's assets (hereinafter "distributable amounts") refers to theamount of profits calculated in conformity with the provisions of the Act Concerning Investment Trusts and Investment
Corporations (hereinafter the"Act") or generally accepted accounting principles in Japan (net assets in the balance sheet as of
the closing date of each fiscal period less unitholders' capital, retained earnings, and evaluation, currency translation, etc.)(Article 17, Item 1 of the Articles of Incorporation of INV).
INV determines the amount of distribution, which must be an amount that exceeds 90% of the amount of INV's
distributable income as stipulated in Article 67, Item 15 (the Special Provisions of Taxation for Investment Corporations) of
the Act on Special Measures Concerning Taxation in principle (hereinafter "distributable income") (or the relevant amountafter modification if there is any modification to the calculation of the said amount due to revisions to the law, etc.)(However, the amount may not exceed the distributable amounts.). If, however, a deficiency account for tax purposes arises
or income for tax purposes does not arise due to the carried-over deduction of a deficiency account, INV shall determine theamount of distribution on a rational basis. In addition, INV can accumulate reserves and allowances from the distributable
income amount that are deemed to be necessary for maintaining its investment assets and improving or increasing the valueof assets such as long-term reserve for maintenance, payment reserve, reserve for distribution, and other similar reserves, etc.
(Article 17, Item 2 of the Articles of Incorporation of INV).
Any retained earnings not allocated for dividends will be managed based on INV's investment asset targets and policies(Article 17, Item 3 of the Articles of Incorporation of INV).

bCash Distribution Exceeding Profits
In cases when the distributable amounts is less than 90% of distributable income, or when INV considers it appropriate

taking into consideration the economic circumstances and the trends in the real estate market, the leasing market, the realestate investment and trust securities market, etc. or the impacts which acquisition of assets or the raising of funds will haveon distribution amounts per one unit by INV, INV may, in accordance with the provisions under the Act, determine anadditional amount to be distributed to the unitholders in cash as a refund of the investment over and above the distributableamount, with the upper limit of the additional amount being prescribed in rules of the Investment Trusts Association, Japan,
based on the approved cash distribution statement in accordance with the Act . In this case, if such cash distributions do notsatisfy the requirements for Special Provisions of Taxation for Investment Corporations, INV may distribute monies in an
amount determined by INV for the purpose of satisfying those conditions (Article 17, Item 4 of the Articles of Incorporationof INV).
(a)Basic Policy
In addition to distribution of profits, INV may make distribution in excess of profits (hereinafter the “Excess Profit
Distribution”) to be determined each fiscal period, in accordance with the following basic policy.
(i)
INV will consider making the Excess Profit Distribution in the event of a. or b. below, and, will, in principle, notmake the Excess Profit Distribution in other circumstances.
a. To satisfy the requirements under the Special Taxation Measures Act applicable to INV, in case the distributableamount is less than 90% of distributable income.
b. To stabilize distributions in cases where the investment unit is to be diluted or significant expenses are to berecorded in connection with, among other things, the acquisition of assets or the raising of capital, and the distribution
amount per one unit is expected to decrease temporarily, based on the distribution amount per one unit that assumes thatthe effects of such acquisition of assets or rasing of funds contributed for the full pireod.
(ii) The Excess Profit Distribution amount will be no more than 60%(Note) of the depreciation expenses recognizedon the last day of the fiscal period immediately preceding the fiscal period in which such distribution will be made.
(Note) Per the applicable standards set by the Investment Trusts Association of Japan, closed-end investment
corporation may make the Excess Profit Distribution in the amount up to 60% of the depreciations expenses recognized65

on the last day of the relevant fiscal period.
(iii) With respect to implementation of the Excess Profit Distribution and determination of the Excess Profit
Distribution amount, INV is to carefully consider the following: (i) securing funds necessary to maintain the value, etc.
of INV’s investment assets; (ii) the LTV level (Note) is to not exceed 60% following the Excess Profit Distribution; and(iii) securing liquidity following the Excess Profit Distribution.
(Note) LTV level (%) = a / b x 100%
a = total outstanding balance of interest-bearing debt at fiscal end
b = total assets at fiscal end - expected distribution amount(b)

Approval Process for Excess Profit Distribution
In the event INV decides to make the Excess Profit Distribution, the Asset Manager is to present its executive officers withdrafts of financial statements, asset management report and financial documents relating to cash distributions as well as any
accompanying statement, in each case for the fiscal period immediately preceding the fiscal period in which such
distribution is to be made. In presenting such drafts, the General Manager of the Finance Department of the Asset Manager,in accordance with “(1) Basic Policy” above, is to prepare a proposal taking into account matters affecting cash flow suchas medium to long term capital requirements, etc. (e.g., long-term repair plans) and other necessary matters, and will seek
the approval of the President and CEO of the Asset Manager.

c

Methods of Distribution
Distributions shall be paid in cash and based on the number of investment units held to unitholders who are listed orrecorded in the registry of unitholders on the closing date of each fiscal period, or to registered pledgees of investment units(Article 17, Item 5 of the Articles of Incorporation of INV).

dStatutory Limitation for Dividends
INV will be exempted from its obligation to pay distributions to unitholders or registered pledgees of investment units

after a lapse of three years from the commencement date of payment. No interest will accrue with respect to unpaid
distributions (Article 17, Item 6 of the Articles of Incorporation of INV).
In addition to 1. through 4. above, INV shall comply with the rules of The Investment Trusts Association, Japan, etc. in
cash distributions.

66