Ichigo Hotel (3463)

Ichigo Hotel January 2022 Fiscal Period
Corporate Presentation
March 17, 2022

Ichigo Hotel REIT Investment Corporation (3463)
Ichigo Investment Advisors Co., Ltd.

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

www.ichigo-hotel.co.jp/en

We would like to express our deepest condolences
to all those affected by the March 16, 2022
earthquake off the coast of Fukushima, by the war
and humanitarian crisis in Ukraine, and by the
global Covid pandemic, along with our heartfelt wish
for the immediate cessation of hostilities in Ukraine
and the earliest and fullest possible recovery for all.
Take care, be safe.

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

2

Make The World
More Sustainable© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

January 2022 Results
 January 2022 Highlights
 January 2022 Earnings Breakdown January 2022 Room Revenue +56.8%,
RevPAR +29.2% YOY
 Strong Recovery in Hotel Demand
 Monthly Operating Results Under Covid
 Continued Hotel Demand Recovery Since
Mid-2021
 Operator Changes to Drive Earnings Growth Increasing Stability via Contract Renewals &Rebranding Strong Sponsor Support
 Shareholder Program (1) Shareholder
Discount Program Shareholder Program (2) Ichigo J.League
Shareholder Program

Ichigo’s Commitment to ESG Ichigo Sustainability Policy Delivering on Sustainability
 Full ESG Transparency & Disclosure Ichigo ESG – Environmental
 Ichigo ESG – Social
 Ichigo ESG – GovernanceAppendices Portfolio Details
 Loan Details & Shareholder Composition Growth Roadmap, Sponsor, Shareholder
Alignment

Sustainability as a Key Management Priority
 Sustainability Initiatives
 Market Environment & Forecast Assumptions
 July 2022 Forecast January 2023 Forecast© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

6

January 2022 Results© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

7

January 2022 Highlights
Net Income & Dividend Exceeded Revised Forecast Announced in Jan 2022

Net Income
RevPAR

Results

Details+JPY 60M (+21.3%) vs. revised forecast• Generated variable rent at 3 hotels• +JPY 158M (+85.9%) vs. initial forecast announced on
Sep 2021

JPY 342M
JPY 3,112 (15 variable rent hotels)-JPY 91 (-2.8%) vs. revised forecast• Occupancy: 68.8% (vs. 66.7% forecast)• ADR: JPY 4,522 (vs. JPY 4,802 forecast)NOI

JPY 938M+JPY 66M (+7.6%) vs. revised forecast• Operating Revenue +JPY 23M, +2.1% vs. initial forecast• Decrease in Operating Expenses due to unused Covidrelated reserves

FFO

JPY 2,471• FFO up on NOI increase

Dividend

JPY 1,345+JPY 237 (+21.4%) vs. revised forecast• Operating Revenue increase driving Dividend increase• +JPY 621, +85.8% vs. initial forecast announced on Sep
2021

NAV

JPY 128,766• Total unrealized gains: JPY 1.29B+JPY 309 (+14.3%) YOY-JPY 241 (-0.2%) vs. previous period

FFO (Funds from Operations) = (Net Income + Depreciation + Amortization of Expenses Related to REIT Establishment + Amortization of Share Issuance Expenses+ Loss on Disposal of Fixed Assets + Accrued Asset Disposal Costs +/- Losses/Gains on Sales +/- Extraordinary Losses/Gains) / Number of Shares Outstanding
NAV = BPS + Unrealized Capital Gains per Share© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

8

January 2022 Earnings Breakdown(JPY million)

Jan 2021
ActualJan 2022
Actual (A)Forecast (B)(Jan 2022)

vs. Forecast(A) - (B)

1,035

1,125

1,102

+23

Forecast(Sep 2021)
F
1,007

Variable Rent

-3

147

124

+23

33

Fixed Rent

993

933

933

–

933

Other (Gains on Sales, etc.)

45

44

44

–

44

626

653

687

-34

670

Repair & Maintenance

43

34

36

-2

36

Depreciation

341

355

351

+4

351

Operating Profit

409

472

414

+58

336

Recurring Profit

210

274

209

+65

111

Net Income

209

342

282

+60

184

JPY 823

JPY 1,345

JPY 1,108+JPY 237

JPY 724FFO

JPY 2,162

JPY 2,471

–

–

–

NOI

844

938

872

+66

777

Post-Depreciation NOI

503

583

521

+62

425

Capex

123

206

388

-182

388

52,076

51,915–––

Operating Revenue

Operating Expenses

Dividend

Book Value© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Major Variation Factors (vs. Forecast)

Increase in variable rent (Valie Hiroshima, Yokohama,
Asagaya)Decrease in property tax -4,
Decrease in Covid-related reserve -36
Increase in AM fee +12, Decrease in administration fees -7

Non-operating income +6
Decrease in borrowing-related expenses -1+21.4% vs. Revised forecast announced on Jan 2022
+85.8% vs. Initial forecast announced on Sep 2021
+63.4% YOY (+JPY 522)

Decrease due to effective cost controls & shift in renovation
schedule

9

January 2022 Room Revenue +56.8%, RevPAR +29.2% YOY
Variable Rent Hotels (15 Hotels)

Aug 1, 2020
- Jan 31, 2021

Aug 1, 2021
- Jan 31, 2022

Room Revenue (JPY M)

848

1,330

+482

+56.8%

2,538

Total Revenue (JPY M)

964

1,483

+519

+53.8%

2,853

RevPAR (JPY)

2,408

3,112

+704

+29.2%

6,166

Occupancy

54.9%

68.8%

+13.9%+25.3%

84.4%

ADR (JPY)

4,383

4,522

+138

+3.2%

7,302

Aug 1, 2020
- Jan 31, 2021

Aug 1, 2021
- Jan 31, 2022

Room Revenue (JPY M)

1,330

1,883

+553

+41.6%

3,645

Total Revenue (JPY M)

1,458

2,049

+591

+40.5%

3,990

RevPAR (JPY)

2,523

3,088

+565

+22.4%

6,136

Occupancy

52.3%

64.4%

+12.1%+23.2%

83.8%

ADR (JPY)

4,828

4,795

-33

-0.7%

7,322

ChangeAug 1, 2019
- Jan 31, 2020

YOY

Total Portfolio (21 Hotels)

ChangeAug 1, 2019
- Jan 31, 2020

YOY

* Excludes Capsule Plus Yokohama and Washington Hotel Plaza Shimonoseki Eki Nishi. Operating results before acquisition are based on data provided byprevious owner.

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

10Strong Recovery in Hotel Demand
YOY by Region (Aug 2021– January 2022)
RevPAR

Occupancy

ADR

Total
Portfolio

Hokkaido

Tokyo

21 Hotels (excludes Capsule Plus Yokohama and Washington
Hotel Plaza Shimonoseki Eki Nishi)

Tokai/
Chubu

Kyoto

Osaka

Kobe

Chugoku/
Shikoku

Kyushu

+292%
+193%
+50%

+47%

+39%
+22% +23%

+34%

+29%

+29%
+23%

+21%
+14%
+5%

+24%

+20%
+18%
+12%

+21%

+10%

+10%

+3%

+2%

-1%
-7%
-14%
-25%

(JPY)

RevPAR

4,008

4,690

2,953

1,780

1,293

3,837

2,636

2,851

No. Hotels

3

3

4

1

2

1

5

2

% of Total
Portfolio Rental
Income

7%

13%

23%

3%

6%

4%

33%

5%

Nest Hotel Osaka Shinsaibashi was closed from April l17, 2020 to November 19, 2020, January 13, 2021 to March 31, 2021, and April 18, 2021 to August 6, 2021, and
The OneFive Osaka Sakaisuji (formerly Chisun Inn Osaka Honmachi) was closed from April 17, 2020 to August 31, 2021
© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

11

Monthly Operating Results Under Covid (Jan 2020 – Jan 2022)
RevPAR
5,000

(JPY)

4,530

RevPAR (left axis, JPY)

State of
Emergency

4,495

4,000

YOY (right axis)

Go To Travel Campaign

+102%
+72%

3,292
2,760

3,000
2,306

2,270

-17%

2,489

Jan
2020

Feb

Mar

-83%

-84%

-77%

-69%

-67%

Apr

May

Jun

Jul

Aug

-56%

-56%

Sept

Oct

Occupancy (left axis)

+44%

+32%

72%

46%

Jan
2021

-50%

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

Jan
2022

-100%

150%

50%

64%

62%

53%

+65%

55%
48%

53%

54%

66%

66%

62%

+19%

+26%

50%

55%

+44%

100%

73%

60%

56%

44%

71%

+13%

+51%

+40%

+18%

0%

+4%

24%

-18%
-44%

Feb

Dec

-9%

-39%

34%

30%

Jan
2020

0%

+20%

+80%

40%
-7%

-55%

50%

Go To Travel Campaign

51%

20%

Nov

-57%

+82%
+57%

YOY (right axis)

56%

60%

-49%

100%

+121%

State of
Emergency

79%

2,415

-7%

-34%

100%

0%

2,054

2,291

2,993

2,978

+58%

1,031

Occupancy

80%

2,220

2,377

3,156

3,747
3,480

3,276

1,445
1,175

-63%

0

3,035

2,592

2,001

2,000
1,000

2,482

150%

+122%

Mar

-66%

-71%

Apr

May

-62%

Jun

-47%

Jul

-43%

Aug

-36%

-34%

-28%

Sept

Oct

Nov

-24%
-42%

-44%

Dec

Jan
2021

Feb

-50%

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

Jan
2022

-100%

Major Events
Mar 2020 State of emergency
Jun 2020 Ban on travel between prefectures lifted
Oct 2020 Tokyo added to Go To Travel campaign

Dec 2020 Restrictions on entry from overseas
Feb 2021 Vaccine rollout begins for healthcare workers
Apr 2021 Vaccine rollout expanded to the elderly

Jul 2021 Tokyo Olympics
Sep 2021 State of emergency lifted
Jan 2022 Quasi-state of emergency* Excludes Washington Hotel Plaza Shimonoseki Eki Nishi because the operator did not provide consent to disclose information© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

12

Continued Hotel Demand Recovery Since Mid-2021
Ichigo Hotel RevPAR (vs. 2019) and Hotel Reservations
Business Hotels

Full-Service Hotels+40%
Resort Hotels

Japanese Inns

Number of Guests

Ichigo Hotel RevPAR

+20%

0%

-20%

-40%

-60%

-80%

-100%

Jan
2020

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

Jan
2021

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

* Calculated by Ichigo Investment Advisors based on Japan Tourism Agency (JTA) “Statistical Survey of Travelers”

−
−
−
−

After October 2021, demand gradually recovered on back of vaccine rollout and lifting of
the state of emergencies
Business hotel RevPAR decrease was minimal compared to other hotel types
Number of inbound tourists in 2021 dropped 94% vs. 2020, and recovery is not expected
for a while
Occupancy at Ichigo Hotel portfolio assets outperformed during February to October 2021

* Ichigo Hotel RevPAR is that for variable rent hotels© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

13

Operator Changes to Drive Earnings Growth (1)The OneFive Osaka Sakaisuji (Former Chisun Inn Osaka Honmachi)− Hotel operator change from third-party operator to Ichigo-owned Hakata Hotels
upon expiration of lease contract− Rebranded and reopened as The OneFive Osaka Sakaisuji− Occupancy on track since rebranding in September 2021
Before vs. After Rebranding
100%
2019

2021

80%
60%
40%
20%
0%
Sep

Oct

Nov

Dec

Jan

Note: 2020 comparison is unavailable because the hotel was closed from Sep 2020 to Jan 2021.

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

14

Operator Changes to Drive Earnings Growth (2)The OneFive Garden Kurashiki (Former Court Hotel Kurashiki)− Hotel operator change from third-party operator to Ichigo-owned Hakata Hotels
upon expiration of lease contract− Rebranded and reopened as The OneFive Garden Kurashiki in February 2022
− Growing revenue amidst Covid via collaboration with sponsor Ichigo© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

15

Increasing Stability via Contract Renewals & Rebranding
TimingHotel Name

Lease Terms

ChangesJun 2020

Smile Hotel Tokyo Asagaya

Variable+Fixed
Rent

Lease Renewal

Oct 2020

The OneFive Okayama(formerly Comfort Hotel Okayama)

Fixed Variable+Fixed
Rent

Rebranding• Operator change to Hakata Hotels• Increased fixed rent & added variable rent

Oct 2020

The OneFive Fukuoka Tenjin(formerly Valie Hotel Tenjin)

Variable+Fixed
Rent

Rebranding• Operator change to Hakata Hotels• Revised variable rent

Feb 2021

Capsule Plus Yokohama(formerly Grandpark-Inn Yokohama)Fixed Variable Rent

Rebranding• Added GOP-linked variable rent

Aug 2021

Hotel Wing International Nagoya

Variable+Fixed
Rent

Lease Renewal

Sep 2021

The OneFive Osaka Sakaisuji(formerly Chisun Inn
Osaka Hommachi)

Variable+Fixed
Rent

Rebranding• Operator change to Hakata Hotels• Revised variable rent

Feb 2022

The OneFive Garden Kurashiki(formerly Court Hotel Kurashiki)

Variable+Fixed
Rent

Rebranding• Operator change to Hakata Hotels© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

• Increased fixed rent
• Revised variable rent

• Decreased fixed rent
• Revised variable rent

16Strong Sponsor Support (1)Changed Hotel Operator to Ichigo-owned Hakata Hotels− Veteran hotel operator with expertise in AI revenue management (PROPERA) –operates 14 hotels with focus on the Hakata (Fukuoka) area
− Maintained high occupancy, substantially outperforming other hotels(Hotels using PROPERA achieved 90% occupancy during the January 2022 fiscal period)− Became the operator of Court Hotel Kurashiki (rebranded as The OneFive Garden
Kurashiki) in February 2022 – already the operator of the Okayama, Fukuoka
Tenjin, and Osaka Sakaisuji hotels− Selected as operator among multiple candidates due to offering superior terms− Prevented loss of a hotel operator amidst Covid
Hotels Operated by Hakata Hotels
Kyushu(Fukuoka City)

Chugoku© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

KansaiTokyo

Hokkaido(Sapporo City)

17

Strong Sponsor Support (2)Bond Issuances Further Strengthening Ichigo Hotel’s Financial Base
− Demonstrates strong commitment and support from the sponsor− Objective: To further strengthen Ichigo Hotel’s financial base amid an uncertain
market environment
Issue Date

Name

Issue AmountInterest Rate

Issuance
PeriodNovember 25, 2020

First Unsecured Investment
Corporation Bond

JPY 500M

2.0%

5.4 years

September 30, 2021

Second Unsecured Investment
Corporation Bond

JPY 370M

2.0%

5.5 years

Total

JPY 870M––© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

18

Shareholder Program (1)Shareholder Discount Program− Program Established to Express Gratitude to Ichigo Hotel Shareholders
and to Support the Hotel Industry Impacted by Covid− K.K. Hospitality Operations Added as Operator From January 2022 Fiscal
PeriodSpecial Discount Rates (including hotels not owned by Ichigo Hotel)
Minacia Co., Ltd.
 Hotel Wing International
 Special rate 10% lower than rates
on hotel website
 39 Hotel Wing International Hotels
located across Japan, from
Hokkaido to Kagoshima

Greens Co., Ltd.
 Choice Hotels
 Premium rates set at each hotel
 73 Comfort brand hotels locatedacross Japan, from Hokkaido to
Okinawa

K.K. Hospitality Operations
 Smile Hotels
 Special rate 10% lower than rates
on hotel website
 66 Smile Hotel and Hotel Emisia
brand hotels located across Japan,
from Hokkaido to Okinawa

 Greens Hotels
 Available at member-only fixed rates
set at each hotel A diverse brand of 27 hotels mainlyin Mie and Aichi prefectures and the
Hokuriku region© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

19

Shareholder Program (2)Ichigo J.League Shareholder Program
Represents Two Firsts for a Shareholder Program in Japan− First Japanese company to include not just its own shareholders, but also theshareholders of the REITs and listed solar power producer that it manages, in its
shareholder program (65,000 shareholders total)− First company to offer shareholders free tickets to every J.League game at every
J.League club

Ichigo is deepening its partnership with the J.League and working tofurther Ichigo’s mission of promoting local community development.
Events & Gifts− Ichigo Kids J.League Events
 Escort players onto field High-fives with players
 Other programs− J.League Merchandise Autographed jerseys from all
J.League clubs
 Ichigo original J.League towels
 Autographed official match balls− J.League Online Events
Ichigo J.League Shareholder Program Website Landing Page
© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

20

Sustainability as a Key Management Priority© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

21

Sustainability Initiatives (1)Minimizing Environmental Impact of Ichigo Hotel-Owned Assets
Environmental Certifications− HOTEL EMIT SHIBUYA (BELS 4 Stars)− Joined GRESB Real Estate Assessment in 2021
− Awarded 2 Stars in GRESB rating− Won Green Star designation− Energy efficiency assessments for 2 hotels to be conducted from April 2022

Energy Efficiency Improvements− 68 energy efficiency improvements made between August 2020 and July 2021,
including installing LED lights and upgrading air conditioning units, water heating
systems, water faucets, and toilet tanks− c. 25% of expenses (value-add capex + repair expenses) is related to energy
efficiency improvements

Disclosure of Energy Consumption Levels and Energy Reduction Targets− Aiming to disclose energy consumption levels and energy reduction targets on
the Ichigo Hotel website by January 2023

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

22

Sustainability Initiatives (2)Shift to Renewable Energy− Executed renewable energy contracts for 9 hotels as of January 2022 fiscal
period, of which 2 hotels have begun sourcing renewable energy− 14 remaining hotels to be transitioned sequentially from February 2022 onwards
Renewable Energy
Transition Completed

Renewable Energy
Contracts Executed

Court Hotel Suzuka
HOTEL EMIT SHIBUYA

Nest Hotel Sapporo Ekimae
Nest Hotel Sapporo Odori
The OneFive Fukuoka Tenjin
The OneFive Okayama
Capsule Plus Yokohama
The OneFive Osaka Sakaisuji
Smile Hotel Kyoto Shijo

RE100
A global initiative bringing together businesses committed to 100% renewable electricity, including solar, wind, hydro, and biomassenergy, and accelerating the change towards a zero-carbon society.
Ichigo (2337), Ichigo Hotel’s sponsor, joined RE100 in February 2021 and set a target to source 100% renewable electricity acrossits operations, including Ichigo Hotel (3463) and Ichigo Office (8975), by 2025.
© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

23

Market Environment & Forecast Assumptions
Hotel Market Gradually Recovering− Conservative forecasts despite gradual hotel demand recovery

Occupancy and ADR Forecasts for 15 Variable Hotels− Forecasting Occupancy at -10~-20% & ADR at -30~-40% vs. 2019 (Pre-Covid)
levelsJuly 2019
ActualOccupancy
ADR

ADR

July 2021
ActualJuly 2022
Forecast

YOY

86.2%

49.9%

65.4%

73.0%

+11.7%

JPY 8,475

JPY 5,102

JPY 4,381

JPY 4,891+11.6%

January 2020
ActualOccupancy

July 2020
ActualJanuary 2021
ActualJanuary 2022
ActualJanuary 2023
Forecast

YOY

84.3%

54.9%

68.8%

75.9%

+10.3%

JPY 7,428

JPY 4,383

JPY 4,522

JPY 5,602+23.9%* Data of 12 hotels for July 2019 fiscal period, 13 hotels for January 2020 fiscal period, 14 hotels for July 2020 fiscal period, and 15 hotels
for January 2021 fiscal period© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

24

July 2022 Forecast
Dividend JPY 838, -20.6% YOY
 Assumes Covid-related hotel leases to local governments will last 2-3
months, not entire fiscal period(JPY million)
Jul 2021
Actual (A)Jul 2022
Previous
Forecast(Sept 2021)

Jul 2022
Revised
Forecast (B)Major Factors for Variation(B) - (A)Operating Revenue

1,117

1,024

1,069

-48

Variable Rent

126

79

122

-4

Increase in variable rent +78 (Kumamoto, Yokohama, Sapporo Ekimae, Nagoya,Matsuyama, Kurashiki, Osaka Sakaisuji, Sapporo Odori)
Decrease in variable rent -83 (Valie Hiroshima)

Fixed Rent

947

902

902

-45

Increase in fixed rent +29 (Fukuoka, Okayama)
Decrease in fixed rent -74 (Nagoya, Kurashiki, Osaka Sakaisuji)

Other (Gains on Sales, etc.)

44

43

45

+1

652

629

647

-5

Repair & Maintenance

46

34

44

-2

Depreciation

347

351

351

+4

Operating Profit

465

395

421

-44

Recurring Profit

269

170

214

-55

Net Income

268

169

213

-55

JPY 1,055

JPY 666

JPY 838-JPY 217

NOI

912

832

867

-45

Post-Depreciation NOI

565

481

515

-50

Capex

335

546

283

-52

Operating Expenses

Dividend

Increase in property tax +3, Management outsourcing fee -5
Decrease in AM fee -9, Administration fees +4

Increase in Depreciation: Okayama, Fukuoka, Yokohama, Urbain Hiroshima, Matsuyama

Interest expenses +9, Amortization of bond issuance expenses +1
Fall-off of non-operating income -1-20.6% YOY+25.8% (+JPY 172) vs. previous forecast© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

25

January 2023 Forecast
Dividend JPY 858, -36.2% YOY
 Assumes no Covid-related hotel leases to local governments
 Fall-off of previous period's extraordinary gain from lawsuit settlement(JPY million)

Jan 2022
Actual (A)Jan 2023
Forecast (B)Major Factors for Variation(B) - (A)Operating Revenue

1,125

1,093

-32

Variable Rent

147

135

-12

Increase in variable rent +117 (Sapporo Ekimae, Nagoya, Yokohama, Osaka Sakaisuji)
Decrease in variable rent -129 (Valie Hiroshima)

Fixed Rent

933

912

-21

Increase in fixed rent +19 (Fukuoka, Osaka Sakaisuji)
Decrease in fixed rent -40 (Kurashiki, Nagoya, Okayama)

Other (Gains on Sales, etc.)

44

45

+1

653

642

-11

Repair & Maintenance

34

35

+1

Depreciation

355

351

-4

Operating Profit

472

451

-21

Recurring Profit

274

219

-55

Net Income

342

218

-124

JPY 1,345

JPY 858-JPY 487

NOI

938

901

-37

Post-Depreciation NOI

583

550

-33

Capex

157

456

+299

Operating Expenses

Dividend

Increase in property tax +4, Decrease in AM fee -20
Shareholder meeting-related expenses +4, SG&A expenses +4

Decrease in Depreciation: Osaka Sakaisuji, Sapporo Odori, Kurashiki

Borrowing-related expenses +12, Interest expenses +14
Amortization of bond issuance expenses +1, Fall-off of non-operating income -7-36.2% YOY© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

26

Ichigo’s Commitment to ESG© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

27

Ichigo Sustainability Policy
Harmony with the Environment
Ichigo actively monitors and minimizes the environmental impact of its business operations.

Energy Conservation, CO2 Reduction, and Recycling
Ichigo seeks to contribute to a low-carbon, low-waste society by reducing energy
consumption, extending the useful life of assets, actively recycling, reducing waste
production and water consumption, and implementing green procurement measures.

Regulatory and Environmental Compliance
Ichigo complies with all environmental laws and regulations and Ichigo’s own independentlyestablished environmental rules. Ichigo also carefully monitors and complies with all applicablechanges in laws and regulations.

Training and AwarenessIchigo promotes understanding of its Sustainability Policy and works to increase sustainability
awareness among all Ichigo employees.

Sustainability Performance Communication and Disclosure
Ichigo communicates its Sustainability Policy and Ichigo’s sustainability initiatives to society atlarge. Ichigo also obtains certifications for its sustainability activities on an ongoing basis.

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

28

Delivering on Sustainability
Clean Energy Business Growth Addressing Critical Environmental Issues
Ichigo is Net Zero Carbon Today
Total Ichigo Power Plant CO2 Reductions

Total Ichigo CO2 Emissions■ Ichigo (93,526 tons)■ Ichigo Green (22,357 tons)■ Ichigo (28,763 tons)■ Ichigo Office (22,727 tons)■ Ichigo Hotel (7,745 tons)

115,884

59,235tons

tons

FY21/2 Actuals
Note: Ichigo CO2 reductions are also significantly greater than pre-Covid emissions. FY20/2 CO2 Emissions: 75,807 tons

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

29

Full ESG Transparency & Disclosure
ICHIGO Sustainable City

Ichigo Sustainability Report

Introducing Ichigo’s Vision for Society’s Future

Promoting Awareness of Ichigo’s Sustainability
Initiatives via Ichigo Sustainability Report

Sustainable InfrastructureSportsSenior Management Message

Sustainable Business Management

CultureSmart Agriculture

Sustainability Policy

ESG Initiatives

Regional Development

ESG/SDGs

Third-Party Assessments

ESG Data

Ichigo Brand Site: ICHIGO Sustainable City

Ichigo Sustainability Reportwww.ichigo.gr.jp/company/brand (Japanese only)

www.ichigo.gr.jp/pdf/esg/Ichigo_Sustainability_Report_ENG.pdf© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

30

Ichigo ESG – Environmental
Sustainability-Driven & Climate Positive
Effective Use of Existing Real Estate

Towards a Net Zero Carbon Society

J-REIT Initiatives

Preserve & Improve Real Estate
to End Wasteful Demolition

Community-Based, Productive Use of
Idle Land for Clean Energy

Pro-Active Environmental
Certifications

Ichigo's Sustainable Real Estate businesshas a proven track record of preserving andimproving existing real estate. Ichigo willbuild on this long-standing commitment tosustainability by developing newtechnologies to extend the lives of buildings
and other social infrastructure 100 years
and beyond.

Ichigo will not build power plants that
require the clearing of wooded land or thealtering of the landscape in a way that
increases the risk of floods, landslides, orother water-related disasters, or that face
opposition from local communities.
Annual Power Production

By obtaining certifications such as GRESB,CASBEE, BELS, and DBJ Green Building,
Ichigo is demonstrating our long-standing
commitment to sustainability via initiatives
that benefit investors, tenants, clients, andother stakeholders.

Ichigo’s Sustainable Real Estate
Preserve & Create Value
Sustainable
Real Estate

Increase
Quality ofTenantServices+

186,921,674 kWh
Equivalent to annual
energy consumption of
62,307 households
Annual CO2 Reduction

Increase= Tenant
Satisfaction

Renovate &RepairImprove aesthetics and comfort
Seismic reinforcements
Regulatory compliance
Increase energy efficiency

123,368,301 kg
Equivalent to annual
CO2 emission of
53,638 cars
* July 2020 – June 2021 Actuals

Ichigo Hotel(3463)

Ichigo Office(8975)

Certifications• HOTEL EMITSHIBUYA(BELS, 4 stars)
GRESB (Since 2021)• Received Green Star.
Evaluated for ESG,
management, &performance
Transition to Renewable
Energy• Completed at 2 hotels• To be transitioned
sequentially at otherhotels from February
2022 onwards

Certifications• 20 (19 assets)• 33.2% of total leasable
office area
GRESB (Since 2016)• Received Green Star
for 5 years in a row.
Evaluated for ESG,
management, &performance
Transition to Renewable
Energy• To be completed at all
74 assets by April 2022
(excludes partially-owned
assets)(as of February 28, 2022)© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

31

Ichigo ESG – Social
Contributing to a Sustainable Society
Contributing to Regional Revitalization

Ichigo University

Ichigo works to revitalize local communities
and promote regional economic
development. Ichigo’s model of preserving
and improving existing real estate creates
jobs and supports businesses, and ourclean energy plants also support their hostcommunities by providing new andsustainable sources of income.

Ichigo established Ichigo University in May
2013 to support employees’ continuing
education and personal growth.
Ichigo University courses are taught byemployees and external professionals whoare specialists in their fields and have deep
experience.

Sports Initiatives

As a top partner of the J.League
professional soccer league, we support theleague’s mission to promote community
development. Ichigo supports outstanding
athletes in weightlifting, rifle shooting, andtrack and field.

Average Annual Number of Courses: 30
THE KNOT TOKYO
Shinjuku

Ichigo University Classes

Hotel / Tokyo
https://hotel-theknot.jp/tokyoshinjuku/en

Miyako City
Retail Asset / Miyazaki
www.miyakocity.com

Chisato Kiyoyama(Track and Field)
OnlineIn-Person

Hiromi Miyake(Weightlifting)
Ichigo Sports Site (Japanese only)
www.ichigo.gr.jp/ichigosports© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

32

Ichigo ESG – Governance
Global Best Practice Governance
No Fixed Fee,
Performance FeeOnly Structure

Best Practice GovernanceREIT Shifted to performancelinked fee structure to
support shareholder
value creation on
February 1, 2019
 Pro-active, dynamic
management of Ichigo
Hotel assets on behalfof shareholders

Asset Management Company (AMC) Monitors Asset Management Company• All Ichigo Hotel Directors are Independent
Directors• Active dialogue and effective internal controls
via Board discussions led by REIT Executive
Director• Draw upon expertise of REIT Supervisory
Directors (qualified lawyers & accountants)

 Best Practice• Majority of AMC Directors (3 of 5) are
Independent Directors• Independent asset management team & bestpractice execution on behalf of Ichigo Hotel
REIT within AMC• Compliance and Audit are directly under the
AMC President to monitor and review criticalcompliance matters• Ensure objectivity by including third-party,
independent lawyers and accountants in theInvestment and Risk & Compliance Committees

Only 3 J-REITS (out of 61), including Ichigo Hotel (3463) and Ichigo Office (8975),
have both an Asset Management Company (AMC) board that has a majority of Independent
Directors and whose AMC President does NOT serve as the Executive Director of the REIT
Independence of the Investment Corporation From AMC

Independent Directors at AMC➡ 28 of 61 J-REITs have AMC Presidents serving as➡ Only 3 Asset Management Companies have any

Executive Director of the REIT

Independent Directors

All Ichigo Hotel Directors are Independent

3 of 5 Ichigo Investment Advisors' Directors
are Independent* Based on research as of February 28, 2022

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

33

Appendix: Portfolio Details© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

34

Hotel Map
Tokyo

Hokkaido

Kanto
C-4

C-1

C-3

Smile HotelTokyo Asagaya

Hotel Livemax
NihombashiHakozaki

HOTEL
EMIT
SHIBUYA

Kinki (Kyoto/Osaka/Kobe)
E-1

E-3

Hokuriku/Tokai

B-1

A-1

A-2

A-3

D-1

Capsule Plus
Yokohama

Nest Hotel
Sapporo Ekimae

Nest Hotel
Sapporo Odori

ComfortHotel Kushiro

Comfort Hotel
Hamamatsu

F-2

F-3

G-1

D-3

D-4

Comfort Hotel
Hotel Wing
International Central International
AirportNagoyaKyushuChugoku/Shikoku
F-1

D-2

Comfort Hotel
Suzuka▶ Sapporo
A-1 A-2

G-3▶ Kushiro
A-3

Variable Rent
Fixed Rent
Smile Hotel
Kyoto Shijo

The OneFive
Osaka Sakaisuji

The OneFive
Okayama

F-4
E-4

Hotel Wing International
Kobe Shin Nagata Ekimae

Nest Hotel
Matsuyama

F-5

Urbain Hiroshima
Executive

Nest Hotel
Kumamoto

The OneFive
Fukuoka Tenjin

E-5

Nest Hotel Osaka
Shinsaibashi

23 Hotels
JPY 51.9B

F-6▶ Nagoya D-2▶ Kyoto E-1

Court Hotel
Kurashiki*

Valie Hotel
Hiroshima

Washington Hotel
Plaza Shimonoseki
Eki Nishi* Rebranded and reopened as The OneFive Garden Kurashiki in February 2022

▶ Osaka E-3 E-5▶ Kurashiki F-4▶ TokyoC-1 C-3 C-4▶ Yokohama B-1▶ Shimonoseki F-6▶ Fukuoka
G-1▶ Hamamatsu D-1▶ Matsuyama▶ Aichi D-3
F-2▶ Suzuka D-4▶ Kumamoto▶ Kobe E-4
G-3▶ Okayama F-1▶ Hiroshima F-3 F-5(January 2022 rent-basis)© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

35

Portfolio Growth

Acquisitions

IPO(Nov 30, 2015)

Jan 2017
Fiscal Period

July 2017 through January 2022
Fiscal Periods

IPO Acquisitions
9 hotels
JPY 20.4B

PO Acquisitions
10 hotels
JPY 27.2B

July 2017
1 hotelJPY 1.4B

Jan 2018
1 hotelJPY 1.8B

Jan 2019
1 hotelJPY 1.7B

July 2019
2 hotels
JPY 3.7B(Appraisal
NOI Yield
5.9%)(Appraisal
NOI Yield
5.5%)(Appraisal
NOI Yield
5.0%)(Appraisal
NOI Yield
6.3%)(Appraisal
NOI Yield
6.9%)(Appraisal
NOI Yield
6.9%)

None

23 Hotels
JPY 54.4B

Sales

None

None

None

None

1 HotelJPY 2.7B
Gains on Sale
JPY 0.69B

Portfolio
Size

9 Hotels : JPY 20.4B(January 2016 end)

19 Hotels
JPY 47.6B

21 Hotels
JPY 49.1B

21 Hotels
JPY 50.9B

21 Hotels
JPY 50.7B

IPO

Location

Kobe Osaka
7.3% 8.0%
Nagoya
13.1%
Kyushu6.8%

Geographic Diversification
Increases Earnings Stability

Kyoto
39.6%

Steady Portfolio Growthvia Acquisitions

Hokkaido
17.7%
Tokai
7.6%

Jan 2020
None

2 Hotels
JPY 9.7B
Gains on Sale
JPY 1.94B

July 2020 Jan 2021 2 hotels Jan 2022
JPY 4.7B(Appraisal
NOI Yield
4.9%)

None

None

None

21 Hotels 23 Hotels 23 Hotels
JPY 47.1B JPY 51.9B JPY 51.9B
January 31, 2022
Yokohama Kobe
2.9%
Nagoya 2.9%
5.1%
Kyushu
Osaka
6.9%
17.8%
Hokkaido
7.5%
Tokyo
17.3%

Kyoto
8.6%
Chugoku/
Shikoku
17.2%
Tokai
13.8%

Acquisition price-basis© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

36

Portfolio Lease Details
Operator Diversification Driving Earnings Stability
Lease Terms

Fixed Rent

Fixed + Variable Rent

(as of January 31, 2022)

Variable Rent

Total

Form of Contract

Lease

Lease

Lease

Lease

–

Fixed Rent

Yes

Yes

Yes

–

–

Variable Rent–

Fixed Portion of
Revenue Upside

Fixed Portion of Hotel
GOP

Excess Above FixedPortion of Hotel GOP–

Rental Income(January 2022
Actual)JPY 385M(35.7%)

JPY 71M(6.6%)

JPY 615M(56.9%)

Not Available2

JPY 1,081M(100%)

Number of Hotels

7 Hotels

2 Hotels

13 Hotels

1 Hotel23 Hotels

Total AcquisitionPrice

JPY 11.70B(22.5%)

JPY 4.16B(8.0%)

JPY 34.57B(66.6%)

JPY 1.49B(2.9%)

JPY 51.91B(100%)

Hotels• Comfort Hotel Kushiro• Hotel Wing International• Comfort Hotel Hamamatsu
Nagoya• Comfort Hotel Central• Hotel Wing International
International Airport
Kobe Shin Nagata Ekimae• Comfort Hotel Suzuka• Hotel Livemax NihombashiHakozaki• Urbain Hiroshima Executive• Washington Hotel Plaza
Shimonoseki Eki Nishi• Nest Hotel Sapporo Ekimae• Nest Hotel Sapporo Odori• Nest Hotel Osaka
Shinsaibashi• Nest Hotel Matsuyama• Nest Hotel Kumamoto• Smile Hotel Tokyo Asagaya• Smile Hotel Kyoto Shijo• Valie Hotel Hiroshima• The OneFive Fukuoka
Tenjin• Court Hotel Kurashiki1• HOTEL EMIT SHIBUYA• The OneFive Okayama• The OneFive Osaka
Sakaisuji• Capsule Plus Yokohama–

1 Changed operator, and rebranded and reopened as The OneFive Garden Kurashiki in February 2022
2 Operator did not provide consent to disclose information© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

37

Individual Hotel Summary(as of January 31, 2022)
F

Hotel
No.

Hotel

Hotel Name

Lease Terms

Location

Leasable
Area
2

(m )

Acquisition
Price(JPY M)

Book Value(JPY M)(A)

Jan 2022 Appraisal
Value
Cap Rate(JPY M)(% )(B)

Unrealized
Gains (JPY M)(B) - (A)

A-1

Nest Hotel Sapporo Ekimae

Variable + Fixed Rent

Sapporo5,734.93

2,160

2,104

2,590

5.1

+485

A-2

Nest Hotel Sapporo Odori

Variable + Fixed Rent

Sapporo5,638.78

1,450

1,461

1,820

5.0

+358

A-3

Comfort Hotel Kushiro

Fixed Rent

Kushiro, Hokkaido

3,180.58

300

287

366

5.5

+78

B-1

Capsule Plus Yokohama

Fixed Rent

Yokohama

1,183.26

1,490

1,557

1,310

4.8

-247

C-1

Smile Hotel Tokyo Asagaya

Variable + Fixed Rent

Tokyo

2,721.70

3,910

3,893

4,280

4.3

+386

C-3

Hotel Livemax Nihombashi-Hakozaki

Fixed Rent

Tokyo

853.00

1,360

1,278

1,380

4.6

+101

C-4

HOTEL EMIT SHIBUYA

Variable + Fixed Rent

Tokyo

1,470.52

3,700

3,802

3,960

3.6

+157

D-1

Comfort Hotel Hamamatsu

D-2

Hotel Wing International Nagoya

Fixed Rent

Hamamatsu, Shizuoka

4,173.92

1,550

1,406

1,750

5.2

+343

Variable + Fixed Rent

Nagoya5,255.66

2,670

2,692

2,150

4.7

-542

D-3
D-4

Comfort Hotel Central International Airport

Fixed Rent

Tokoname, Aichi

11,599.63

5,308

5,233

5,790

4.1

+556

Comfort Hotel Suzuka

Fixed Rent

Suzuka, Mie

2,186.65

300

267

359

5.0

+91

E-1

Smile Hotel Kyoto Shijo

Variable + Fixed Rent

Kyoto

4,891.84

4,480

4,519

3,570

4.5

-949

E-3

The OneFive Osaka Sakaisuji

Variable + Fixed Rent

Osaka

3,568.32

1,630

1,753

1,220

4.8

-533

E-4

Hotel Wing International Kobe Shin Nagata Ekimae

Variable + Fixed Rent

Kobe

4,540.90

1,490

1,380

1,810

4.7

+429

E-5

Nest Hotel Osaka Shinsaibashi

Variable + Fixed Rent

Osaka

8,057.26

7,600

7,569

5,460

4.4

-2,109F-1

The OneFive Okayama

Variable + Fixed Rent

Okayama

5,543.70

1,200

1,203

1,760

5.7

+556

F-2

Nest Hotel Matsuyama

Variable + Fixed Rent

Matsuyama, Ehime

6,671.94

1,610

1,611

1,970

5.6

+358

F-3

Urbain Hiroshima Executive

Fixed Rent

Hiroshima

2,756.20

1,800

1,790

2,060

5.3

+269

F-4

Court Hotel Kurashiki

Variable + Fixed Rent

Kurashiki, Okayama

3,964.19

1,725

1,816

2,220

5.2

+403

F-5

Valie Hotel Hiroshima

Variable + Fixed Rent

Hiroshima

4,332.50

1,500

1,546

1,660

5.0

+113

F-6

Washington Hotel Plaza Shimonoseki Eki Nishi

Fixed Rent

Shimonoseki, Yamaguchi

5,709.35

1,080

1,082

1,180

4.9

+97

G-1

The OneFive Fukuoka Tenjin

Variable + Fixed Rent

Fukuoka

1,910.94

1,380

1,451

2,220

4.3

+768

G-3

Nest Hotel Kumamoto

Variable + Fixed Rent

Kumamoto

6,404.36

2,220

2,204

2,330

5.4

+125

Total (23 Hotels)

102,350.13

51,913

51,91553,215

4.7+1,299© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

38

January 2022 Fiscal Period Individual Hotel Operating Results(year-on-year)
Hotel
No.

Hotel Name

Lease Terms

Location

No. Of
Guest
Rooms

January 2022 (August 2021 - January 2022)
RevPAR (JPY)

Occupancy (%)

ADR (JPY)

Revenue (JPY M)

A-1

Nest Hotel Sapporo Ekimae

Variable + Fixed Rent

Sapporo

162

3,970

(+16.2%)91.0%(+12.1%)

4,363(+3.7%)

147.3(+17.2%)

A-2

Nest Hotel Sapporo Odori

Variable + Fixed Rent

Sapporo

121

3,692

(+28.6%)82.9%(+25.5%)4,454(+2.5%)

99.7(+35.1%)

A-3

Comfort Hotel Kushiro

Fixed Rent

Kushiro, Hokkaido

126

4,362

(+19.6%)75.5%(+7.9%)

5,779(+10.8%)106.9(+19.3%)

C-1

Smile Hotel Tokyo Asagaya

Variable + Fixed Rent

Tokyo

112

5,360

(+28.3%)

99.1%(+17.9%)5,410(+8.7%)

112.6(+26.3%)

C-4

HOTEL EMIT SHIBUYA

Variable + Fixed Rent

Tokyo

72

5,224

(+22.1%)

98.9%(+5.5%)

5,285(+15.7%)

69.3(+21.8%)

D-1

Comfort Hotel Hamamatsu

Fixed Rent

Hamamatsu, Shizuoka

196

2,884

(+36.6%)

58.8%(+38.2%)

4,906(-1.1%)

104.0(+36.6%)

D-2

Hotel Wing International Nagoya

Variable + Fixed Rent

Nagoya224

1,911(+37.5%)45.1%(+45.2%)4,233(-5.3%)

87.2(+35.9%)D-3

Comfort Hotel Central International Airport

Fixed Rent

Tokoname, Aichi

346

3,670

(+27.8%)54.0%(+45.3%)

6,791(-12.1%)

239.5(+26.5%)

D-4

Comfort Hotel Suzuka

Fixed Rent

Suzuka, Mie

105

2,941

(+12.1%)

61.0%(+18.0%)4,821(-5.0%)

57.4(+12.1%)

E-1

Smile Hotel Kyoto Shijo

Variable + Fixed Rent

Kyoto

144

1,780

(+28.7%)54.6%(+50.0%)3,263(-14.2%)

48.5(+28.4%)

E-3

The OneFive Osaka Sakaisuji

Variable + Fixed Rent

Osaka

130

1,946

–

82.1%

–

2,371

–

39.0

–

E-4

Hotel Wing International Kobe Shin Nagata Ekimae

Variable + Fixed Rent

Kobe

133

3,837

(+20.3%)

53.5%(+17.5%)7,169(+2.4%)

104.4(+18.3%)

E-5

Nest Hotel Osaka Shinsaibashi

Variable + Fixed Rent

Osaka

302

1,053

(+138.7%)

31.8% (+175.0%)

3,317(-13.2%)68.8(+265.9%)

F-1

The OneFive Okayama

Variable + Fixed Rent

Okayama

208

3,082

(+45.6%)97.6%(+40.0%)3,157(+4.0%)

123.3(+77.9%)F-2

Nest Hotel Matsuyama

Variable + Fixed Rent

Matsuyama, Ehime

190

2,962

(-0.7%)

64.4%(+1.6%)

4,598(-2.2%)

131.5(+4.7%)

F-3

Urbain Hiroshima Executive

Fixed Rent

Hiroshima

171

1,183

(-58.5%)23.7%(-44.6%)4,998(-25.1%)

37.2(-45.5%)

F-4

Court Hotel Kurashiki

Variable + Fixed Rent

Kurashiki, Okayama

107

1,603

(-35.9%)25.9%(-25.5%)

6,190(-14.0%)40.7(-19.9%)

F-5

Valie Hotel Hiroshima

Variable + Fixed Rent

Hiroshima

171

7,500

(+465.0%)

100.0% (+223.7%)

7,500(+74.5%)249.6(+664.7%)

G-1

The OneFive Fukuoka Tenjin

Variable + Fixed Rent

Fukuoka

77

3,338(+66.3%)97.0%(+56.7%)3,442(+6.1%)

53.0(+61.0%)

G-3

Nest Hotel Kumamoto

Variable + Fixed Rent

Kumamoto

201

2,664

(+11.1%)

68.5%(+7.9%)

3,889(+2.9%)

108.2(+9.7%)

Other

455

Variable Rent Hotels

2,523

3,112

(+29.2%)68.8%(+25.3%)4,522(+3.2%)

1,483.2(+53.8%)Fixed Rent Hotels

1,230

3,032

(+10.1%)

54.1%(+15.3%)5,608(-4.5%)

566.4(+14.6%)

Total

3,753

3,088

(+22.4%)64.4%(+23.2%)

4,795(-0.7%)

2,049.6(+40.5%)* Operating Results data for Hotel Livemax Nihombashi-Hakozaki, Capsule Plus Yokohama, and Washington Hotel Plaza Shimonoseki Eki Nishi are consolidated under Other,because the hotel operators did not provide consent to disclose hotel-specific data. Fixed Rent Hotels and Total include Hotel Livemax Nihombashi-Hakozaki’s operating
results.

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

39

Individual Hotel Financials(JPY thousand)
A-1
Total

A-2

A-3

Nest Hotel Nest Hotel
SapporoSapporoEkimae
Odori

C-1

C-4

D-1

ComfortHotel
KushiroSmile HotelTokyo
Asagaya

HOTEL
EMITSHIBUYA

D-3

D-4

Comfort Hotel
Comfort Hotel
CentralHamamatsu International
Airport

E-1

E-3

E-5

F-1

F-2

F-4

ComfortHotel
SuzukaSmile Hotel
Kyoto Shijo

The OneFive
Osaka
Sakaisuji

Nest Hotel
Osaka
Shinsaibashi

The
OneFive
Okayama

Nest Hotel
Matsuyama

F-5

Court Hotel Valie Hotel
Kurashiki Hiroshima

G-1

G-3

The
OneFive
FukuokaTenjinNest Hotel
Kumamoto

Other(A) Rental Income

1,125,819

32,392

26,083

18,41964,26544,93255,361

151,441

15,442

34,644201

65,487

72,23335,72028,267

158,520

26,74526,401

269,256

Fixed Rent

933,355

32,392

26,083

18,41959,282

44,93255,361

151,441

15,442

34,644201

65,487

72,23335,71728,26722,871

26,74527,348

216,480

Variable Rent

147,812

–

–

–

4,982

–

–

–

–

–

–

–

–

–

–

135,049

–

-946

8,728

Other Rent

44,650

–

–

–

–

–

–

–

–

–

–

–

–

3

–

600

–

–

44,047(B) Rental Expenses

187,056

9,948

12,308

5,933

9,961

5,982

3,931

14,510

3,740

6,757

7,056

17,242

6,053

6,567

15,474

6,829

4,778

7,583

42,396

Outsourcing
Fees

17,676

600

600

900

2,721

600

600

570

540

600

1,005

1,200

600

720

600

720

600

780

3,720

Insurance

3,599

193

200

103

112

73

124

359

61

166

122

307

182

252

127

166

68

230

745

RepairExpenses

34,437

3,780

2,946

508

3,055

295

550

572

995

730

2,404

1,238

1,123

1,400

10,303

1,502

392

1,470

1,169

Taxes

114,835

4,951

8,127

4,008

3,662

4,653

2,386

12,599

1,733

4,902

3,161

14,088

3,730

3,784

4,080

4,071

3,355

4,691

26,847

Other
Expenses

16,506

422

434

412

409

359

271

409

409

359

362

409

416

409

363

368

362

410

9,914

NOI
(A) - (B)938,762

22,443

13,774

12,48654,303

38,95051,430136,931

11,702

27,886-6,85548,24566,18029,153

12,793

151,691

21,966

18,817

226,859(D) Depreciation

355,572

16,05017,961

5,668

26,5897,731

14,921

34,8904,148

16,8789,353

34,852

16,612

18,612

11,982

21,205

8,415

20,057

69,641Net Rental
Income(C) - (D)583,190

6,393-4,186

6,818

27,71331,21836,508102,040

7,554

11,008-16,208

13,392

49,567

10,541810

130,486

13,551-1,239157,218(C)* Rents for Hotel Wing International Nagoya, Hotel Wing International Kobe Shin Nagata Ekimae, Hotel Livemax Nihombashi-Hakozaki, Capsule Plus Yokohama, Urbain Hiroshima
Executive, and Washington Hotel Plaza Shimonoseki Eki Nishi as well as retail income of The OneFive Osaka Sakaisuji, Smile Hotel Tokyo Asagaya, and Nest Hotel Kumamoto areincluded in Other, as the operators did not provide consent to disclose the data.

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

40

Fixed/Variable Rent, RevPAR, ADR, & Occupancy Trends
Fixed/Variable Rent

Jan 2021
Rent

Ratio

1,023,280–

976,19687.3%

962,540

85.5%

Fixed Rent from Operators

993,875–

947,03184.7%

933,355

82.9%

Other (Rent from Retail Tenants)

29,405–29,164

2.6%

29,184

2.6%

Variable Rent

-3,942–

126,577

11.3%

147,812

13.1%

Other (Utility Income)

16,238–15,184

1.4%

15,466

1.4%

1,117,958

100%

1,125,819

100%

Rent

Fixed Rent

1,035,576

Total

Jul 2021
Rent

100%

Jan 2022
Rent(JPYRatio
thousand)

Ratio

Operating Results (Feb 2021 – Jan 2022)

RevPAR (right axis)

ADR (right axis)

Occupancy (left axis)

(JPY)

80%

8,000

60%

6,000

40%

4,000

20%

2,000

0

0%
Feb 2021

Mar 2021

Apr 2021

May 2021

Jun 2021

Jul 2021

Aug 2021

Sep 2021© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Oct 2021

Nov 2021

Dec 2021

Jan 2022

41

Variable Rent Hotel Details
A-1 Nest Hotel Sapporo Ekimae
Location

SapporoAccess5-minute walk from
Sapporo Station on
Sapporo City Metro
Namboku LineOperator

Nest Hotel Japan
Corporation

ADR(right)Operating Results (Feb 2021 – Jan 2022)

RevPAR(right)Occupancy(left)
(JPY)

100%

7,500

80%

6,000

60%

4,500

40%

3,000
1,500

Guest Rooms

162

20%

AcquisitionPrice

JPY 2.16B

0%0Feb 2021

May 2021

Aug 2021

Nov 2021

A-2 Nest Hotel Sapporo Odori
Location

SapporoAccess4-minute walk from
Odori Station on
Sapporo City Metro
Namboku LineOperator

Nest Hotel Japan
Corporation

Guest Rooms
Acquisition
Price

ADR
(right)Operating Results (Feb 2021 – Jan 2022)

RevPAR(right)Occupancy(left) (JPY)

100%

7,500

80%

6,000

60%

4,500

40%

3,000

121

20%

1,500

JPY 1.45B

0%0Feb 2021© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

May 2021

Aug 2021

Nov 2021

42

Variable Rent Hotel Details
B-1 Capsule Plus Yokohama
Location

Yokohama, Kanagawa

Access6-minute walk from
Yokohama Station on
JR/ Subway LineOperator

The hotel operator did not give consent to disclose data.

nine hours Inc.

Guest Rooms

169

AcquisitionPrice

JPY 1.49B

C-1 Smile Hotel Tokyo Asagaya
Location

Suginami-ku, Tokyo

Access1-minute walk from
Asagaya Station on JR
Chuo/Sobu LineOperator

K.K. Hospitality
Operations

Guest Rooms
Acquisition
Price

Operating Results (Feb 2021 – Jan 2022)

ADR(right)

RevPAR(right)100%

Occupancy(left)
(JPY)

7,500

80%

6,000

60%

4,500

40%

3,000

112

20%

1,500

JPY 3.91B

0%0Feb 2021© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

May 2021

Aug 2021

Nov 2021

43Variable Rent Hotel Details
C-4 HOTEL EMIT SHIBUYA
Location

Shibuya-ku, Tokyo

Access6-minute walk from
Shibuya Station on JR,
Tokyu, Keio, andTokyo Metro Lines

Operator

Hakata Hotels Inc.

Guest Rooms

72

AcquisitionPrice

JPY 3.7B

ADR(right)Operating Results (Feb 2021 – Jan 2022)

RevPAR(right)Occupancy(left)
(JPY)

100%

7,500

80%

6,000

60%

4,500

40%

3,000

20%

1,500

0%

0
Feb 2021

May 2021

Aug 2021

Nov 2021

D-2 Hotel Wing International Nagoya
Location

NagoyaAccess2-minute walk from
Marunouchi Station on
both Nagoya Subway
Network SakuradoriLine and Tsurumai
Line

Operator

Minacia Co., Ltd.

ADR
(right)Operating Results (Feb 2021 – Jan 2022)

RevPAR(right)Occupancy(left)
(JPY)

100%

7,500

80%

6,000

60%

4,500

40%

3,000
1,500

Guest Rooms

224

20%

AcquisitionPrice

JPY 2.67B

0%0Feb 2021© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

May 2021

Aug 2021

Nov 2021

44

Variable Rent Hotel Details
E-1 Smile Hotel Kyoto Shijo
Location

Kyoto

Access5-minute walk from
Shijo Station on Kyoto
City Subway Karasuma
Line and Karasuma
Station on Hankyu
Kyoto Main LineOperator

K.K. Hospitality
Operations

Guest Rooms

144

AcquisitionPrice

JPY 4.48B

ADR(right)Operating Results (Feb 2021 – Jan 2022)

RevPAR(right)Occupancy(left)
(JPY)

100%

7,500

80%

6,000

60%

4,500

40%

3,000

20%

1,500

0%

0
Feb 2021

May 2021

Aug 2021

Nov 2021

E-3 The OneFive Osaka Sakaisuji
Location

Osaka

Access5-minute walk from
Sakaisuji-Hommachi
Station on Osaka
Municipal Subway
Chuo LineADR(right)Operating Results (Feb 2021 – Jan 2022)

RevPAR(right)Occupancy(left)(JPY)

100%

10,000

80%

8,000

60%

6,000

Hakata Hotels Inc.

40%

4,000

Guest Rooms

130

20%

2,000

AcquisitionPrice

JPY 1.63B

0%Operator0
Feb 2021

May 2021

Aug 2021

Nov 2021* Closed in December 2020. Changed operator and rebranded and reopened as The OneFive Osaka Sakaisuji in September 2021.

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

45

Variable Rent Hotel Details
E-4 Hotel Wing International Kobe Shin Nagata Ekimae
ADR(right)

RevPAR(right)Occupancy(left)(JPY)

Location

Kobe

100%

10,000Access2-minute walk from
Shin Nagata Station
on JR Kobe Line and
JR Sanyo Honsen Line

80%

8,000

60%

6,000

Minacia Co., Ltd.

40%

4,000

Guest Rooms

133

20%

2,000

AcquisitionPrice

JPY 1.49B

0%Operator

Operating Results (Feb 2021 – Jan 2022)

0
Feb 2021

May 2021

Aug 2021

Nov 2021

E-5 Nest Hotel Osaka Shinsaibashi
Location

Osaka

Access1-minute walk from
Nagahoribashi Station
on Osaka Municipal
Subway Sakaisuji LineADR
(right)Operating Results (Feb 2021 – Jan 2022)

RevPAR(right)Occupancy(left)
(JPY)

100%

7,500

80%

6,000

60%

4,500

Nest Hotel Japan
Corporation

40%

3,000

Guest Rooms

302

20%

1,500

AcquisitionPrice

JPY 7.60B

0%Operator0
Feb 2021© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

May 2021

Aug 2021

Nov 2021

46

Variable Rent Hotel Details
F-1 The OneFive Okayama
Location

OkayamaAccess15-minute walk from
Okayama Station on
Sanyo Shinkansen,
Sanyo Main Line, Uno
Line

ADR
(right)Operating Results (Feb 2021 – Jan 2022)

RevPAR(right)Occupancy(left)
(JPY)

100%

7,500

80%

6,000

60%

4,500

Hakata Hotels Inc.

40%

3,000

Guest Rooms

208

20%

1,500

AcquisitionPrice

JPY 1.20B

0%Operator0
Feb 2021

May 2021

Aug 2021

Nov 2021

F-2 Nest Hotel Matsuyama
Location

Matsuyama, Ehime

Access25-minute drive from
Matsuyama Airport,
3-minute walk from
Katsuyamacho Station
on Iyo Railway Jonan
Line

ADR
(right)Operating Results (Feb 2021 – Jan 2022)

RevPAR(right)Occupancy(left)
(JPY)

100%

7,500

80%

6,000

60%

4,500

Nest Hotel Japan
Corporation

40%

3,000

Guest Rooms

190

20%

1,500

AcquisitionPrice

JPY 1.61B

0%Operator0
Feb 2021© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

May 2021

Aug 2021

Nov 2021

47

Variable Rent Hotel Details
F-4 Court Hotel Kurashiki
Location

Kurashiki, Okayama

Access8-minute walk from
Kurashiki Station on
JR Sanyo Main LineADR
(right)Operating Results (Feb 2021 – Jan 2022)

RevPAR(right)Occupancy(left)(JPY)

100%

10,000

80%

8,000

60%

6,000

The Court Co., Ltd.

40%

4,000

Guest Rooms

107

20%

2,000

AcquisitionPrice

JPY 1.73B

0%Operator0
Feb 2021

May 2021

Aug 2021

Nov 2021* Closed in December 2021. Changed operator and rebranded and reopened as The OneFive Garden Kurashiki in February 2022.

F-5 Valie Hotel Hiroshima
Location

Hiroshima

Access3-minute walk from
Jogakuin-mae Station
on Hiroden Tram LineADR
(right)Operating Results (Feb 2021 – Jan 2022)

RevPAR(right)Occupancy(left)(JPY)

100%

10,000

80%

8,000

60%

6,000

The Court Co., Ltd.

40%

4,000

Guest Rooms

171

20%

2,000

AcquisitionPrice

JPY 1.50B

0%Operator0
Feb 2021

May 2021

Aug 2021

Nov 2021* Hiroshima Prefecture has temporarily leased all rooms of the Valie Hotel Hiroshima starting on February 8, 2021.

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

48

Variable Rent Hotel Details
G-1 The OneFive Fukuoka Tenjin
ADR(right)

RevPAR(right)Occupancy(left)(JPY)

Location

Fukuoka

100%

7,500

Access6-minute walk from
Tenjin Station on
Fukuoka City Subway
Kuko Line

80%

6,000

60%

4,500

Hakata Hotels Inc.

40%

3,000

Guest Rooms

77

20%

1,500

AcquisitionPrice

JPY 1.38B

0%Operator

Operating Results (Feb 2021 – Jan 2022)

0
Feb 2021

May 2021

Aug 2021

Nov 2021

G-3 Nest Hotel Kumamoto
Location

Kumamoto

Access2-minute walk from
Nishikarashimacho
Station on Kumamoto
City Tram LineADR
(right)Operating Results (Feb 2021 – Jan 2022)

RevPAR(right)100%

Occupancy(left)
(JPY)

7,500

80%

6,000

60%

4,500

Nest Hotel Japan
Corporation

40%

3,000

Guest Rooms

201

20%

1,500

AcquisitionPrice

JPY 2.22B

0%Operator0
Feb 2021© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

May 2021

Aug 2021

Nov 2021

49

Fixed Rent Hotel Details
A-3 Comfort Hotel Kushiro
Location

Kushiro, Hokkaido

C-3 Hotel Livemax Nihombashi-Hakozaki
Location

Chuo-ku, Tokyo

Access2-minute walk from
Kushiro Station on JR
Nemuro Main Line

Access3-minute walk from
Suitengumae Station
on Tokyo Metro
Hanzomon LineOperator

Greens Co., Ltd.

Operator

Live Max Inc.

Guest Rooms

126

Guest Rooms

48

AcquisitionPrice

JPY 300M

AcquisitionPrice

JPY 1.36B

D-1 Comfort Hotel Hamamatsu
Location

Hamamatsu, Shizuoka

D-3 Comfort Hotel Central International Airport
Location

Tokoname, Aichi

Access2-minute walk from
Hamamatsu Station on
JR Tokaido Main Line,
Tokaido Shinkansen

Access5-minute walk from Central
International Airport,
3-minute walk from Central
International Airport Station
on Meitetsu Airport LineOperator

Greens Co., Ltd.

Operator

Greens Co., Ltd.

Guest Rooms

196

Guest
Rooms

346

AcquisitionPrice

JPY 1.55B

AcquisitionPrice© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

JPY 5.31B

50

Fixed Rent Hotel Details
D-4 Comfort Hotel Suzuka

F-3 Urbain Hiroshima Executive
Location

Hiroshima

Access3-minute walk from
Shirako Station on
Kintetsu Nagoya Line

Access6-minute walk from
Hiroshima Station on
JR Sanyo Shinkansen
and Sanyo Main LineOperator

Greens Co., Ltd.

Operator

Yuki Corporation

LocationSuzuka, Mie

Guest Rooms

105

Guest Rooms

171

AcquisitionPrice

JPY 300M

AcquisitionPrice

JPY 1.80B

F-6 Washington Hotel Plaza Shimonoseki Eki Nishi
Location

Shimonoseki,
Yamaguchi

Access3-minute walk from
Shimonoseki Station
on JR Sanyo MainLine

Operator

Washington HotelCorp.

Guest Rooms

238

AcquisitionPrice

JPY 1.08B© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

51

Appendix: Loan Details & Shareholder Composition© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

52

Stable Financial Base
Outstanding Loan Balance
Jan 31, 2020
AmountJul 31, 2020

Jan 31, 2021

Jul 31, 2021

Jan 31, 2022

JPY 25.47B

JPY 25.47B

JPY 25.47B

JPY 25.47B

JPY 25.47B

Long-Term Loan Ratio

100%

93.1%

72.5%

72.5%

72.5%

Fixed Rate Ratio

83.5%

91.4%

70.7%

70.7%

70.7%

Average Interest Rate

0.88%

0.87%

0.82%

0.75%

0.77%

Average Remaining Maturity

2.5 years

2.5 years

2.3 years

1.8 years

1.6 years

LTV (Total Assets Basis)

41.5%

43.6%

43.3%

43.2%

42.9%

* The above does not include investment corporation bonds.

Distribution of Loan Maturities(JPY M)
10,000

Fixed Rate
Floating Rate
Bonds

8,800
8,000

7,000

6,000

4,500

4,000

4,500
2,500
500
2,000

3,000

2,000

450

2,220

1,800

370

0
Jul 2022

Jan 2023

Jul 2023

Jan 2024

Jul 2024

Jan 2025

Jul 2025© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Jan 2026

Jul 2026

Jan 2027

Jul 2027

53

Loan Details
Loan

LenderAmount(JPY million)

Floating/
Fixed

Interest Rate(%)

Borrowing Date

Maturity

Term Loan 4

SMBC, Mizuho, Shinsei, Resona, Fukuoka,
Nishi-Nippon City

4,500

Fixed

0.90750%

August 17, 2016

February 28, 2023

Term Loan 5

SMBC, Mizuho, Shinsei, Resona, Fukuoka,
Nishi-Nippon City

4,500

Fixed

0.98500%

August 17, 2016

August 31, 2023

Term Loan 7

SMBC, Mizuho, Shinsei, Resona, Fukuoka,
Nishi-Nippon City

1,800

Fixed

0.78750%

August 1, 2017

January 31, 2023

Term Loan 9

SMBC, Mizuho, Shinsei, Resona

1,500

Fixed

0.92000%

November 30, 2018

November 29, 2024

Term Loan 10

SMBC, Mizuho, Shinsei, Resona, Nishi-Nippon
City

2,220

Fixed

0.75450%

April 25, 2019

April 30, 2024

Term Loan 11

SMBC, Mizuho, Shinsei, Resona, Aozora

1,500

Fixed

0.73575%

July 19, 2019

November 29, 2024

Term Loan 12

SMBC

450

Variable

0.51727%

February 28, 2020

February 28, 2022

Term Loan 13

SMBC, Mizuho, Shinsei, Resona, Fukuoka,
Nishi-Nippon City

2,000

Fixed

0.65600%

February 28, 2020

February 27, 2026

Term Loan 16

SMBC, Mizuho, Shinsei, Resona

7,000

Variable

0.56727%

November 30, 2021

November 30, 2022

Total Borrowings
Issue Date

Name

済方

(as of January 31, 2022)

Lender Composition

25,470Issue Amount(JPY million)

Average 0.77%

Average Remaining Loan Term 1.6 years

Interest Rate

Redemption Date

2.00%

April 30, 2026

First Unsecured Investment Corporation Bond
November 25, 2020 (Callable bonds subordinated and limited toqualified institutional investors)

500

Second Unsecured Investment Corporation
September 30, 2021 Bond (Callable bonds subordinated and limited
to qualified institutional investors)

370

2.00%

Total Bonds

870

Average 2.00%

Total Interest-Bearing Liabilities

26,340

Average 0.81%

Fukuoka3%
Nishi-Nippon
City
4%

Aozora1%

Resona
10%

Bonds
3%

SMBC
37%

Shinsei
12%
Mizuho30%

Fixed vs. Floating

Issuance Period 済方
5.4 years
Variable
28.3%

March 31, 2027

5.5 years
Fixed*
71.7%

Average Remaining Loan Term 1.7 years* Includes interest fixed via swaps© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

54

Shareholder Composition
Major Shareholders (as of January 31, 2022)
Name

By Number of Shares Held
No. OfSharesShare

1

Custody Bank of Japan, Ltd.,
Trust Account26,81310.5%

2

The Master Trust Bank of Japan,
Trust Account24,401

3 Ichigo Trust Pte. Ltd.

Domestic Financial Institutions
Domestic Individuals

38,334(15.0%)

36,820(14.4%)

9.6%

15,430(6.1%)

16,260(6.4%)

10,9084.3%

75,764(29.7%)

81,103(31.8%)

125,446(49.2%)

120,791(47.4%)

116,495(45.7%)

Jul 2021(254,974 shares)

Jan 2022(254,974 shares)

4

Nomura Trust & Banking Co., Ltd.,
Investment Trust Account

9,634

3.8%

5

BNP PARIBAS SECURITIES SERVICESLUXEMBOURG/JASDEC/SECURITIES－AIFM

9,243

3.6%

6,500

2.5%

6 Ichigo Inc. (Sponsor)

Foreign Corporations & Individuals
Non-Financial Domestic Corporations

Custody Bank of Japan, Ltd.,
7
Securities Investment Trust Account

4,304

1.7%

8 Individual Shareholder

3,215

1.3%

3,041

1.2%

2,482

1.0%

100,541

39.4%

Jan 2021(Outstanding Shares) (254,974 shares)

44,388(17.4%)
16,609(6.5%)
77,482(30.4%)

By Number of Shareholders

9

DFA INTERNATIONAL REAL ESTATESECURITIES PORTFOLIO

10 Ueda Yagi Tanshi Co., Ltd.
Total

Jan 31, 2021 Jul 31, 2021
Jan 31, 2022
Shareholders Shareholders Shareholders
Share
Domestic Individuals
Domestic Financial Institutions
City banks, trust banks
Regional banks
Other (including securities companies)

16,98536
4–32

16,17835
4–31

15,456
34
4
–
30

97.4%
0.2%
–
–
0.2%

Non-Financial Domestic Corporations
Foreign Corporations & Individuals
Total

232
144
17,397226
154
16,593222
155
15,867

1.4%
1.0%
100%

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

55

Appendix: Growth Roadmap, Sponsor, Shareholder Alignment© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

56

Ongoing Actions to Drive Increased Shareholder Value
Portfolio Growth & Diversification Drive Earnings Growth & Stability
Organic Growth

External Growth

Current Environment• Both Japanese and inbound demand has dropped
significantly due to Covid, generating ongoing impact on
the hotel market• Supply is exceeding demand in some areas in Japan due
to excessive number of new hotel openings• Financial strength of hotel operators needs to be closely
monitored to verify their rent-paying ability• No new growth driver is currently expected

Current Environment• Sales and acquisitions limited due to ongoing market
uncertainty• Market recovery is expected after vaccine & treatment
regimes become available• Competition for quality assets is expected to intensify

Actions• Proactively execute value-add capex tailored to each hotel• Sell hotels with limited growth potential• Increase earnings by revising fixed rent and variable rent
terms at lease renewal• Grow with sponsor support (Hakata Hotels/PROPERA)

Actions• Continue to grow portfolio of lodging-focused hotels, ahotel type with stable earnings• High underlying land values reflect Ichigo Hotel's highlocation attractiveness and value• Ichigo Hotel's focus on major regional cities withconvenient public transport access and revenue upsidefrom local events further reinforces earnings stability• Geographic diversification and centrally-located hotels withstable demand also support high earnings stability

Dividend Growth© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

57

Ichigo Hotel’s Sponsor: Ichigo (2337)
Core Businesses: Asset Management, Sustainable Real Estate, Clean Energy‒‒‒‒

Manages Ichigo Hotel (3463), Ichigo Office (8975), and Ichigo Green (9282)
TSE First Section, JPX-Nikkei 400 Member
Deeply committed to CSR and Sustainability
Japan’s first zero-carbon listed real estate company
Hiromi Miyake

Ichigo(Weightlifting)(TSE First Section 2337)

Ichigo Green (9282)

Ichigo Preserves andImproves Real Estate

The word “Ichigo” comes from the ancientJapanese proverb, Ichigo Ichie, literally meaning“One lifetime, one encounter.” The phrase was
first used by a 16th century master of the tea
ceremony, Sen no Rikyu. He called upon his
disciples to give total focus and sincerity to eachact of the tea ceremony for every guest, becausethat particular moment will only exist once andmust be fully lived and realized.
Ichigo embraces the Ichigo Ichie philosophy ofsincerity and service, and works to build strong
long-term relationships to support the success of
our clients, shareholders, and all stakeholders.

AssetManagement

Ichigo Investment Advisors

Ichigo Office (8975)
Ichigo Hotel (3463)

Sustainable
Real Estate

Clean Energy
Other

Ichigo Estate

Miyako City

Ichigo Owners

CentroIchigo Land Shinchiku

Storage Plus

Ichigo Real Estate Services
Fukuoka

Ichigo Animation

Ichigo Marché

Hakata Hotels

Ichigo ECO Energy

Ichigo Si© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

58

Synergies Between Ichigo Hotel and Sponsor‒ Strengthen acquisitions through leveraging Ichigo’s sourcing network‒ Increase asset value through Ichigo’s real estate value-add capabilities‒ Drive higher returns for Ichigo Hotel shareholders
Ichigo Hotel (3463)

Buy

Sponsor: Ichigo (2337)

Hotel

Value‐Add

Sell

Make The World
More Sustainable

Buy

Long-Term Asset Management(Grow Earnings for Shareholders)







Sell

Value-Add(Increase Asset Value)

Role

Value-add capex
On-going renovation and equipment renewal
Increase hotel attractiveness & competitiveness
Grow earnings via collaboration with hotel
operators
Grow earnings via rebranding and improving
lease terms
Grow earnings via smart cost control



Hard





Soft

Buy




Rectify building code issues
Seismic and safety reinforcement
Large-scale structural and equipment renewal
Change hotel operator/brandImprove lease terms
Improve hotel operations

Third-Party Investors© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Sell

59

Hakata Hotels & PROPERA− Hakata Hotels, a consolidated subsidiary of Ichigo, is a hotel operator operating
14 hotels across Japan with many located in the Hakata (Fukuoka) area
− Hakata Hotels is deploying PROPERA, an AI-based revenue management systemdeveloped by Ichigo, to maximize earnings and increase guest satisfaction
Name

Hakata Hotels Inc.

Address

3-13-1 Haruyoshi, Chuo-ku, Fukuoka

Representatives

Minoru Ishihara, Representative Director & Chairman
Takanobu Kitazaki, Representative Director & President

Paid-In Capital

JPY 10 million (100% shareholding by Centro Co. Ltd., a 100% Ichigo subsidiary)

Establishment Date

March 2019

Main Business・Development, operation, lease, and management of retail buildings, hotels and restaurants
・Lease and management of real estate・Design and construction of buildings and interior designs
・Consulting services related to retail buildings, retail facilities, and restaurants

Operating Hotels(Number of rooms inparentheses)

Hokkaido: THE KNOT SAPPORO (140)Tokyo: HOTEL EMIT SHIBUYA (72), MusBee Tokyo Hamamatsucho (29)
Kyoto: The OneFive Kyoto Shijo (146)
Osaka: The OneFive Osaka Sakaisuji (130)
Okayama: The OneFive Okayama (208), The OneFive Garden Kurashiki (107)
Fukuoka: The OneFive Villa Fukuoka (50), Plaza Hotel Tenjin (205), Plaza Hotel Premiere (170),
Hotel Il Palazzo (62), The OneFive Marine Fukuoka (103), The OneFive Terrace Fukuoka (82),
The OneFive Fukuoka Tenjin (77)

PROPERA• Increases guest satisfaction• Operating track record of increasing earnings by 10-40%• Starting third-party sales© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

60

Portfolio Growth Opportunity via Ichigo Sponsor Support
20 Hotels (JPY 64B) in Ichigo Sponsor Pipeline as of November 30, 2021
− Lodging-focused hotels across Japan− Locations: Major cities such as Hokkaido, Tokyo, Yokohama, Osaka, and Fukuoka

Hokkaido

FukuokaTokyo

Hiroshima

Fukuoka

Yokohama
Osaka© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

61

Covid Response
Safety Measures and Services for Guests− Installed self-check-in terminals− Offering remote work options (strengthened Wi-Fi networks to accommodate
remote work demand)− Provision of hand sanitizers, periodic disinfections, and mandatory maskwearing for employees− Confirming guest and staff healthTemporarily Closed Hotels during the January 2022 Fiscal Period
Hotel

Dates Closed

Current Status

The OneFive Osaka Sakaisuji(formerly Chisun Inn Osaka Hommachi)

Apr 17, 2020 –Aug 31, 2021

Selected Hakata Hotels as new operator, replacing previous
operator whose lease contract ended on Dec 31, 2020
Rebranded and reopened as The OneFive Osaka Sakaisuji

The OneFive Garden Kurashiki(formerly Court Hotel Kurashiki)

Dec 16, 2021 –Jan 31, 2022

Selected Hakata Hotels as new operator, replacing previous
operator whose lease contract ended on Dec 15, 2021
Rebranded and reopened as The OneFive Garden Kurashiki© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

62

Ichigo Hotel Overview
Ichigo Hotel
Name

Ichigo Hotel REIT Investment Corporation

Securities Code3463

Address

1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo

Executive Director

Osamu Miyashita

Fiscal Periods

January (August 1 - January 31) and July (February 1 - July 31)

Asset Management Company
Name

Ichigo Investment Advisors Co., Ltd.

President

Hiroshi Iwai

Registration &Membership

Financial Instruments Dealer License (Investment
Management Services, Investment Advisory & Agency
Services, and Type II Financial Instruments Services)
Minister of Finance, Kanto Financial Bureau #318

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

63

Disclaimer
These materials are for informational purposes only, and do not constitute or form a part of, and should not be construed as,
an offer to sell or buy securities of Ichigo Hotel REIT Investment Corporation (Ichigo Hotel ).
These materials may contain forward-looking statements regarding the intent, belief or current expectations of Ichigo Hotelwith respect to financial condition and future results. These statements are based on certain assumptions founded on
currently available information. Accordingly, such statements are subject to risks and uncertainties, and there is no assurance
as to actual financial conditions or future results. Actual results may vary from those indicated in the forward-looking
statements.
In creating these materials, Ichigo Hotel and Ichigo Investment Advisors Co., Ltd. (IIA) have sought to provide accurate
information. However, there can be no assurance given as to the accuracy, certainty, validity or fairness of any suchinformation. The content of these materials is also subject to revision or retraction without prior notice.
This document is a translation. If there is any discrepancy between the Japanese version and the English translation,
the Japanese version shall prevail.

Make The World
More Sustainable

Contact:
Ichigo Hotel IR Desk (3463)
TEL: +81-3-3502-4892
E-mail： ir_hotel@ichigo.gr.jp
www.ichigo-hotel.co.jp/en
Ichigo is Japan’s first zero-carbon listed real estate company. We are taking
responsibility for our environmental footprint by offsetting our carbon emissions andinvesting in low-carbon technologies such as solar energy.

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

64