Ichigo Hotel REIT July 2016 Fiscal Period
Corporate Presentation
September 14, 2016

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

© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

www.ichigo-hotel.co.jp/english

© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Ichigo Preserves andImproves Real Estate© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

July 2016 Financial Results Financial Highlights
 Results Above Forecast
 July 2016 Results (Feb-Jul, 6 Months)
 July 2016 Results (Aug-Jul, 12 Months)
 Strategic Value-Add Capex – Nest
Hotel Sapporo Odori
 Loan Details

Portfolio Details
 Hotel-Specific Operating Results Significant Portfolio Growth via Ichigo
Sponsor Support
 Increased Cash Flow Stability via
Portfolio Diversification
 Post-Acquisition Portfolio

Growth Strategy
 Growth Roadmap
 Ichigo Hotel REIT and Ichigo Sponsor
Synergies Portfolio Growth via Ichigo’s Sponsor
Support Value-Add Capex Plan Maximize Variable Rents & Increase NOIJanuary 2017 and July 2017 Forecasts
 January 2017 Fiscal Period Forecast
 July 2017 Fiscal Period Forecast
 July 2017 Forecast Upward Revision
Details Continued Dividend Growth
Appendices Hotel & Portfolio Data
 Hotel Market Environment Additional Loan Details
 Portfolio Strategy/Asset Acquisition/
Shareholder Composition© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

4

July 2016 Financial Results© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

5

Financial Highlights

July 2016 Results
RevPAR 7,693 yen(+356 yen, +4.8% year-on-year)

Organic
Growth699 million yen
NOI(+58 million yen, +9.0% vs. most recent
forecast)

2,825 yen
Dividend(+370 yen, +15.1% vs. most recent
forecast)

Drivers/Dividend Growth• Higher variable rents• Higher operating revenue and lower
operating expenses• +489 yen, +20.9% vs. forecast at IPO(2,336 yen)
• +2,354 yen, 6X vs. Jan 16 dividend Jan(471 yen)© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

6

Results Above Forecast(JPY million)
January 2016

Forecast(as of March
2016)

July 2016

Difference

Major Factors for Variation

Operating Revenue

197

774

730

+44

Variable Rent

66

351

308

+43

Fixed Rent

119

387

387

0

Other

11

35

34

+1

Operating Expense

95

302

307

-5

(Depreciation)

50

101

101

0

Operating Profit

102

472

423

+49

Non-operating revenue

0

1

0

+1

Non-operating expense

36

81

82

-1

Recurring Profit

66

392

341

+51

Net Income

65

391

340

+51

471 yen2,825 yen

2,455 yen+370 yen

NOI

180

699

641

+58

Post-Depreciation NOI

130

598

539

+59

Total Assets

23,071

23,48623,410+76

Interest-Bearing Debt

8,500

8,500

8,500

0

LTV

36.8%

36.2%

36.3%

-0.1%

Dividend Per Share© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Increase in variable rent: +43(Smile Hotel Kyoto Shijo +20, Nest Hotel Sapporo Ekimae +10,
Valie Hotel Tenjin +8, Nest Hotel Sapporo Odori +5)

Decrease in Rental expense: -14
Increase in asset management fee: +9

vs January 2016 fiscal period +2,354 yen
vs initial forecast +370 yen

7July 2016 Results (Feb-Jul, 6 Months)
RevPAR +4.8% and ADR +7.8% Year-on-YearTotal Portfolio
July 15

July 16

7 Hotels with Variable Rents
YoY

July 15

July 16

YoY

RevPAR（yen）

7,337

7,693

+4.8%

7,918

8,709

+10.0%ADR（yen）

7,915

8,531

+7.8%

8,291

9,349

+12.8%

Occupancy

92.7%

90.2%

-2.7%

95.5%

93.2%

-2.5%

(Note) Operating timeframe: July 15 is February 2015 to July 2015; July 16 is February 2016 to July 2016

Total Portfolio

7 Hotels with Variable Rents

RevPAR (right)

ADR (right)

Occupancy (left)
(yen)

100%

10,00092.7%

RevPAR (right)

100%

80%
7,915
7,337

10,00093.2% 9,349

8,000

7,918

60%

6,000

40%

4,000

20%

2,000

0
July 15

July 16

8,709

80%

7,693

0%

Occupancy (left)
(yen)

95.5%

90.2%
8,531

ADR (right)

8,291

8,000

60%

6,000

40%

4,000

20%

2,000

0%

0
July 15

July 16(Note) 7 Hotels with Variable Rents excludes Comfort Hotel Hamamatsu and Hotel Suave Kobe Asuta because the hotel operators did not give provide consent to disclose hotel-specific data.

© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

8

July 2016 Results (Aug-Jul, 12 Months)
RevPAR +9.6% and ADR +11.8% Year-on-YearTotal Portfolio
August 2014 July 2015

August 2015 July 2016

RevPAR（yen）

7,051

7,724

ADR（yen）

7,639

Occupancy

92.3%

7 Hotels with Variable Rents
August 2014 July 2015

August 2015 July 2016

+9.6%

7,537

8,634

+14.6%

8,543+11.8%

7,930

9,266

+16.8%

90.4%

-2.0%

95.0%

93.2%

-2.0%

Total Portfolio

YoY

YoY

7 Hotels with Variable Rents

RevPAR (right)

ADR (right)

Occupancy (left)
(yen)

100%

10,00092.3%

RevPAR (right)

8,543
7,639

Occupancy (left)
(yen)

100%

10,000
95.0%

90.4%

80%

ADR (right)

93.2% 9,266

8,000

8,634

80%

7,724

7,537

7,051

8,000

7,930

60%

6,000

60%

6,000

40%

4,000

40%

4,000

20%

2,000

20%

2,000

0

0%

0%
August 2014 July 2015

August 2015 July 20160August 2014 July 2015

August 2015 July 2016

(Note) 7 Hotels with Variable Rents excludes Comfort Hotel Hamamatsu and Hotel Suave Kobe Asuta because the hotel operators did not give provide consent to disclose hotel-specific data.

© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

9Strategic Value-Add Capex – Nest Hotel Sapporo Odori
Guest Room Renovations (JPY 16.6mm investment) Twin / Triple-Bed Room






Renovated 12 twin-bed rooms to be flexibly
used as triple-bed rooms
Brightened rooms and enhanced design
Post-renovation performance (as of July 2016)
RevPAR： 15,387 yen (+8.6% YoY)
ADR:
15,685 yen (+7.1% YoY)
Expected ROI- Annual GOP +JPY 7.8mm, Annual rent +JPY 3.9mm

BEFORE (Storage Room)

Converted Non-Revenue-Generating Space into
Guest Rooms (JPY 16.3mm investment)

Renovated storage rooms to create two additional
guest rooms (completed in July 2016)
Caters to increased tourist demand
Focus investments on driving higher revenues
Expected ROI- Annual GOP +JPY 6.5mm, Annual rent +JPY 3.3mm© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

AFTER (Twin / Triple-Bed Room)

10

Loan Details
Loan Balance
January 31, 2016

July 31, 2016

August 17, 2016

Outstanding Loan Balance

JPY 8.5B

JPY 8.5B

JPY 19.5B

Long-Term Loan Ratio

100.0%

100.0%

100.0%

Fixed-Rate Loan Ratio

61.8%

61.8%

73.1%

Average Borrowing Rate

0.96%

0.91%

0.89%

Average Remaining Term

4.2 years

3.6 years

5.0 years

36.8%

36.2%

37.7%

LTV

Strong Lender GroupLTV Management
Interest Rate Risk Management

Stable Financial Base

Note: LTV as of August 17, 2016 is derived by adding total assets (July 31, 2016), paid-in amountfrom issuance of new shares (August 16, 2016), and total amount of loans (August 17, 2016).

Distribution of Loan Maturities

Lender Composition(as of July 31, 2016)(as of August 17, 2016)
Bank of Fukuoka
3%

Mizuho35%

5,000

Outstanding loan balance
as of July 31, 2016
New loans of August 17, 2016

5,250
4,500 4,500

4,000

Resona10%
Shinsei
15%

Nishi-Nippon City
Bank
3%

(JPY million)
6,000

Resona
11%

3,250

3,000
SMBC
40%

SMBC
39%

Shinsei
12%

Mizuho
33%

2,000

2,000
1,000
0
Jan July Jan July Jan July Jan July Jan July Jan July Jan July Jan
17 17 18 18 19 19 20 20 21 21 22 22 23 23 24© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

11

Portfolio Details© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

12Hotel-Specific Operating Results
July 2016 Period RevPAR: 7,693 yen (+1,453 yen YoY, +23.3%)
No.

A-1

A-2

D-2

E-1

E-2

E-3

G-1

－

Name

004 Nest Hotel Sapporo Ekimae

008 Nest Hotel Sapporo Odori

003 Hotel Wing International Nagoya

001 Smile Hotel Kyoto Shijo

002 Hotel Vista Premio Kyoto

005 Chisun Inn Osaka Hommachi

009 Valie Hotel Tenjin－

Location

SapporoSapporoNagoya

Kyoto

Kyoto

Osaka

Fukuoka
Hamamatsu, Shizuoka

No. of
Guest Acquisition Date
Rooms
162

117

220

138

84

130

77

July 2016 (February 2016 - July 2016)
ADR
Occupancy
Revenue(% )(yen)(mm yen)

8,430

98.3

8,578

316

(+52.7%)(+8.9%)(+38.8%)(+236)

9,736

95.6

10,188232(+41.5%)(+1.7%)(+39.0%)(+174)

5,326

90.1

5,911

243

(+6.3%)(- 0.3%)(+6.7%)(+165)

11,696100.1

11,683307(+41.6%)(+0.0%)(+41.5%)(+232)

12,33391.0

13,548202(+29.3%)(+8.3%)(+17.4%)(+149)

8,686

89.1

9,749

206

(+7.5%)(- 0.5%)(+8.1%)(+141)

8,132

84.1

9,666

123

(+5.8%)(- 1.3%)(+7.4%)

(+84)

4,826

81.8

5,903

300

(+8.9%)(+6.3%)(+0.5%)(+206)

7,693

90.2

8,531

1,928

(+23.3% )(+3.8% )(+18.8% )(+1,387)

November 2015

November 2015

November 2015

November 2015

November 2015

November 2015

November 2015

196

Other

RevPAR(yen)

November 2015
Kobe, Hyogo
Total Assets (9 Assets)

133
1,257

(Note) Comfort Hotel Hamamatsu and Hotel Suave Kobe Asuta results are included in Other, because the hotel operators did not provide consent to disclose
hotel-specific data.
© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

13

Significant Portfolio Growth via Ichigo Sponsor Support
 Grew Portfolio from JPY 20.4B to JPY 47.6B (2.3X)
 Increased Market Cap and Liquidity via Follow-On Share Offering
Further Growth

JPY 27.2B
JPY 47.6B
JPY 20.4B

Portfolio Size

Pre-Acquisition
Total Assets

July 22
Asset Acquisitions

Post-Acquisition

9 Assets

10 Assets

19 Assets

1,257 Rooms

1,726 Rooms

2,983 Rooms

Portfolio Size

JPY 20.4B

JPY 27.2B

JPY 47.6B

Total Appraisal Value1

JPY 20.6B

JPY 28.2B

JPY 49.5B

Average Appraisal NOI Yield

5.9%

5.5%

5.7%

Post-Depreciation NOI Yield

5.0%

4.3%

4.6%

Total Guest Rooms

2

Quickly Achieve
Portfolio Growth

1 Pre-Acquisition total appraisal value (9 assets) as of July 31, 2016. Total appraisal value as of May 1, 2016 for the 10 new assets. Post-

acquisition total appraisal value as of January 31, 2016 for the existing 9 assets and as of May 31, 2016 for the 10 new assets.
2 Pre-Acquisition Average NOI Yield (9 assets) is calculated as total NOI as of July 31, 2016 divided by total acquisition price. Average

NOI Yield for the 10 new assets is calculated as total NOI as of May 31, 2016 divided by total acquisition price. Post-acquisition Average
NOI Yield is calculated as the sum of total NOI (existing 9 assets) as of July 31, 2016 and total NOI (10 new assets) as of May 31, 2016,
divided by the total combined acquisition price.
© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

14

Increased Cash Flow Stability via Portfolio Diversification
Post-Acquisition Portfolio (Acquisition Price Basis)
Location
Chugoku/
Shikoku
5.9%

Hotel Type
Kyushu/Okinawa
10.8%

Hokuriku/
Tokai
20.6%
Hokkaido/
Tohoku
8.2%

Tokyo
15.1%

Kinki
39.4%

Stay-Only
Hotels100.0%

Rent Type

Asset

Top 3
36.5%
Other
63.5%

© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Fixed Rent
55.7%

Variable
Rent
44.3%

15

Post-Acquisition Portfolio (as of August 17, 2016)
Tokyo

Smile HotelTokyo Asagaya

Smile Hotel
Asakusa

Hotel
Livemax
NihombashiHakozaki▶ Sapporo▶ Kushiro

Hokkaido/Tohoku
Kinki▶ KyotoSmile Hotel
Kyoto Shijo

Nest Hotel Sapporo
EkimaeHotel Vista
Chisun Inn
Premio Kyoto Osaka Hommachi

Nest Hotel
Sapporo Odori

Comfort Hotel
Kushiro▶ Osaka

Hokuriku/Tokai▶ Okayama▶ Suzuka▶ Fukuoka▶ KobeHotel Suave
Kobe Asuta▶ Hamamatsu▶ Matsuyama▶ Nagoya

Nest Hotel Osaka
Shinsaibashi

Kyushu/Okinawa
Comfort Hotel
Hamamatsu

Chugoku/Shikoku

Hotel Wing
International
NagoyaComfort Hotel
CentralInternational
Airport

Comfort Hotel
Suzuka▶ Okinawa
Valie Hotel
TenjinNest Hotel
Naha

Comfort Hotel
Okayama

Nest Hotel
Matsuyama© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

16

Growth Strategy© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

17

Growth Roadmap
Stage I

Stage II

Continuous Dividend Growth via External Growth, Organic Growth, and a Strong Financial Base

External
Growth• Quickly achieve JPY100B total asset size by taking fulladvantage of Ichigo’s sponsor support• Invest primarily in stay-only hotels• Acquisition of conversion-feasible assets and lodging
facilities such as serviced apartments• Asset acquisitions via SPCs

Organic
Growth••• Construct a diversified portfolio to pursue both income
stability and earnings growth• Acquire prime-location full-service hotels and resort hotels in
addition to stay-only hotels• Increase portfolio size and generate scale efficiencies via
acquisitions of newly built hotels in addition to value-add ofexisting hotels

Enhance operational efficiency by monitoring operations and providing advice to partner hotel operators
Increase rents and earnings through value-add strategic CAPEX

Financing• Minimize expenses via collaboration with operators• Further increase earnings via more favorable lease contracts,
rebranding, etc.

• Maintain a strong lender base
• Control LTV• Manage interest rate risk
• Prepare to acquire credit rating• Prepare to enter global REIT indices• Acquire credit rating• Diversify financing• Continue to control LTV and manage interest rate risk
• Enter global REIT indices

Lay Foundation for Growth via Increased
Asset Scale

Pursue Portfolio Diversification,
Stability, and Growth

IPO
July 2016

July 2017© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

January 201918

Ichigo Hotel REIT and Ichigo Sponsor Synergies
 Leverage Ichigo Group’s proprietary sourcing network Increase asset value through Ichigo’s real estate value-add capabilities
 Drive higher returns for Ichigo Hotel REIT shareholders
Ichigo’s Value-Add Business Model
Buy
Sponsor Support:
 Asset Warehousing Acquisition & Credit

Support Leverage Ichigo
Ichigo Hotel REIT

Value-Add

Real
EstatePreserve & Improve

Network

Hard

Sell





Soft





Ichigo Sponsor Value-Add

Long-term Asset Management by Ichigo REIT

(Increases Asset Value)(Grow Earnings and Distribute to Shareholders)

Rectify building code issues
Seismic and safety reinforcement of buildings
Large-scale structural and equipment renewal
Upgrade hotel operator/brandImprove contract terms
Improve hotel operations








Strategic capexLong-term renovation and equipment renewal
Enhance hotel attractiveness & competitiveness
Grow earnings via collaboration with hotel
operators
Grow earnings via rebranding and improving
contract terms
Grow earnings via smart cost control© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

19

External Growth Strategy

Portfolio Growth via Ichigo’s Sponsor Support
13 Assets (JPY 30B) in Sponsor Pipeline as of July 31, 2016
 Locations: Major cities such as Yokohama, Osaka, Nagoya, Fukuoka, andKumamoto Includes development projects to build new hotels
 Asset acquisitions via Ichigo’s proprietary
sourcing routes
Development
Project 1
Tokyo

Development
Project 2
Fukuoka

Aomori City

Fukuoka City

Fukuoka City
Yokohama City

Utsunomiya City

Osaka City

Nagoya City

Naha City
Kumamoto City
© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Osaka City

20

Organic Growth Strategy

Value-Add Capex Plan
Capex Focus on Driving Earnings Growth Capture tourist demand Increase guest satisfaction and ADRs
 Convert non-revenue-generating space into guest rooms at hotels with occupancy of>90%

Smart Renovations and Equipment Renewals
 Maintain asset value through smart, long-term repair plans Equipment renewals that lower operating expenses
Capex Plan from January 2017
Investment(JPY mm)

Expected Rental
Income Increase(JPY mm per annum)

Boost RevPAR and ADR by capturing higher tourist
demand

20.9

4.9

23.4%

Convert non-revenue-generating space into guest
rooms

23.0

7.1

30.9%

Optimal use of low-revenue-generating space

22.5

3.3

14.7%

Convert banquet rooms into four
additional guest rooms

Optimal use of low-revenue-generating space

22.0

3.0

13.6%

Renovation of restaurant

Update and upgrade facilities

20.0

－

－

Renovation of guest rooms andlobby

Boost RevPAR and ADR by capturing higher tourist
demand

32.0

7.7

24.1%

140.4

26.0

18.5%

Expected
Completion Date

Hotel

Oct 2016

Hotel Wing International
NagoyaRenovate all guest rooms
including bathroom remodelingNov 2016

Smile Hotel Kyoto Shijo

Convert storage rooms into two
additional guest rooms

Jan 2017

Nest Hotel Sapporo Odori Split up suite rooms

Feb 2017

Nest Hotel Naha

Mar 2017

Smile Hotel Kyoto Shijo

Mar 2017

Smile HotelTokyo Asagaya

Renovation Details

Purpose

Total

ROI

c

© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

21

Organic Growth Strategy

Maximize Variable Rents & Increase NOI Maximize Variable Rents
Advise and support hotel operators to grow revenues— Drive tourist demand— Monitor and enhance customer satisfaction— Review sales strategy based on market and competition— Optimization of operating expenses

 Review and adjust lease contracts based on operating results andmarket conditions
 Increase non-rent revenue by leveraging common spaces Lower operating expenses© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

22

January 2017 and July 2017 Forecasts© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

23

January 2017 Fiscal Period Forecast
 Dividend forecast: 2,917 yen 10 New Assets Supporting EPS & DPS Growth(JPY million)
July 2016 Actual(A)

January 2017
Forecast (B)(B) - (A)

Major Factors for Variation

Operating Revenue

774

1,547

+773

Variable Rent

351

663

+312

Fixed Rent

387

823

+436

Other

35

60

+25

Operating Expense

302

614

+312

(Depreciation)

101

268

+167

Operating Profit

472

933

+461

Non-Operating Profit

1

0

-1

Non-Operating Expense

81

173

+92

Recurring Profit

392

759

+367

Net Income

391

758

+367

2,825 yen

2,917 yen

+92 yen

NOI

699

1,405

+706

Post-Depreciation NOI

598

1,136

+538

Dividend Per Share© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Increase in rent due to 10 newly acquired assets

Increase in operating expense due to 10 newly acquired assets
Increase in asset management fee: +76
Increase in repair and maintenance expense: +24
Increase in other rental expense: +28
Increase in depreciation due to asset acquisitions

Increase in borrowing-related cost due to asset acquisitions

24

July 2017 Fiscal Period Forecast
 Dividend Forecast: 2,838 yen (-79 yen vs January 2017)
 Core Earnings Growth, but Taxes on 10 New Assets (Impact on
Dividend: -200 yen)
July 2016 Actual(A)

July 2017
Forecast (B)(B) - (A)

Major Factors for Variation

Operating Revenue

1,547

1,638

+91

Variable Rent

663

738

+75

Fixed Rent

823

841

+18

Other

60

58

-2

Operating Expense

614

729

+115

(Depreciation)

268

280

+12

Operating Profit

933

909

-24

Non-Operating Profit

0

0

0

Non-Operating Expense

173

177

+4

Recurring Profit

759

732

-27

Net Income

758

731

-27

2,917 yen

2,838 yen

-79 yen

NOI

1,405

1,443

+38

Post-Depreciation NOI

1,136

1,162

+26

Dividend Per Share(JPY million)© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Increase in rental revenue due to seasonal volatility (Variable rent at
Chisun Inn Osaka Hommachi: +39)
0.5 month rental income increase due to asset acquisitions on
August 17, 2016 during the January 2017 fiscal period

Increase in rental expenses(Property and city planning taxes for newly-acquired assets): +50
Increase in asset management fee: +31
Increase in administrative service fee: +8

Impact of property and city planning taxes for newly-acquired assets on
dividend: -200 yen

25July 2017 Forecast Upward Revision Details
Revised up forecast announced on July 2016 to reflect stronger operating
performance of existing 9 assets and 10 newly-acquired assets(Announced in July 2016)

July 2017
July 2017
Previous Forecast (A) Revised Forecast (B)Operating Revenue

1,566(JPY million)(Announced in Sep 2016)

1,638(B) - (A)

Major Factors for Variation+72

Variable Rent

665

738

+73

Fixed Rent

841

841

0

Other

58

58

0

Operating Expense

710

729

+19

(Depreciation)

278

280

+2

Operating Profit

855

909

+54

Non-Operating Profit

0

0

0

Non-Operating Expense

176

177

+1

Recurring Profit

679

732

+53

Net Income

678

731

+53

2,609 yen

2,838 yen+229 yen

NOI

1,374

1,443

+69

Post-Depreciation NOI

1,096

1,162

+66

Dividend Per Share© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Increase in variable rental income based on actual operating
performance of existing 9 assets for the July 2016 period: +51
Increase in variable rental income based on actual operating
performance of the 10 newly-acquired assets: +21

Increase in repair and maintenance expense: +5
Increase in asset management fee: +1226

Continued Dividend Growth

July 2016
March 2016 Revised Forecast
Revised Forecast

2,606
yen

2,917
yen

ActualMarch 2016
Initial Forecast

2,825
yen

2,455
yen

July 2016
Initial Forecast

2,609
yen

September 2016
Revised Forecast

2,838
yen

ActualAt IPO

471 yen

242 yenJanuary 2016

January 2017

July 2016

January Fiscal Period© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

July 2017
July Fiscal Period27

Appendices© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

28

Hotel & Portfolio Data

© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

29

Hotel Details (Hokkaido & Tohoku Region)
A-1 Nest Hotel Sapporo Ekimae
Annual Operating Results (Aug 2015 to Jul 2016)100

Occupancy (le ft, %)ADR (r ight, ye n)

RevPAR (r ight, yen)
18,00095

15,00090

12,000

85

9,000

80

6,000

75

3,000
Aug 20 15

Nov 20 15

Feb 2016

May 20 16

Converted 12 twin-bed rooms to a more flexible format that allows for triple-bed layouts in April 2016
BeforeAfter

Twin-Bed RoomTwin-Bed Layout© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Triple-Bed Layout

30Hotel Details (Hokkaido & Tohoku Region)
A-2 Nest Hotel Sapporo Odori
Annual Operating Results (Aug 2015 to Jul 2016)100

Occupancy (le ft, %)RevPAR (r ight, yen)
18,00095

15,00090

12,000

85

9,000

80

6,000

ADR (r ight, ye n)

75

3,000
Aug 20 15

Nov 20 15

Feb 2016

May 20 16

Converted 12 twin-bed rooms to a more flexible format that allows for triple-bed layouts, andstorage rooms into guest rooms in July 2016
Triple-Bed Room

New Guest Room (can be used in Triple-Bed Layout )© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

31

Hotel Details (Hokuriku & Tokai Region)
D-1 Comfort Hotel Hamamatsu
Annual Operating Results (Aug 2015 to Jul 2016)100

Occupancy (le ft, %)ADR (r ight, ye n)

RevPAR (r ight, yen)
12,00090

10,000

80

8,000

70

6,000

60

4,000

50

2,000
Aug 20 15

Nov 20 15

Feb 2016

May 20 16

D-2 Hotel Wing International Nagoya
Annual Operating Results (Aug 2015 to Jul 2016)
Occupancy (le ft, %)ADR (r ight, ye n)

100

90

RevPAR (r ight, yen)
12,000

The tenant did not give consent
to disclose theinformation for
Aug − Nov 2015.

10,000

80

8,000

70

6,000

60

4,000

50

2,000
Aug 20 15© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Nov 20 15

Feb 2016

May 20 16

32

Hotel Details (Kinki Region)
E-1 Smile Hotel Kyoto Shijo
Annual Operating Results (Aug 2015 to Jul 2016)
101 .0Occupancy (le ft, %)ADR (r ight, ye n)

RevPAR (r ight, yen)
25,000100 .520,000100 .015,00099.5

10,00099.0

5,000
Aug 20 15

Nov 20 15

Feb 2016

May 20 16

E-2 Hotel Vista Premio Kyoto
Annual Operating Results (Aug 2015 to Jul 2016)
Occupancy (le ft, %)ADR (r ight, ye n)

RevPAR (r ight, yen)

100

95

17,00090
13,000
85
9,000
80

75

5,000
Aug 20 15© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Nov 20 15

Feb 2016

May 20 16

33

Hotel Details (Kinki Region)
E-3 Chisun Inn Osaka Hommachi
Annual Operating Results (Aug 2015 to Jul 2016)100

Occupancy (le ft, %)ADR (r ight, ye n)

RevPAR (r ight, yen)
12,00090

10,000

80

8,000

70

6,000

60

4,000

50

2,000
Aug 20 15

Nov 20 15

Feb 2016

May 20 16

E-4 Hotel Suave Kobe Asuta
Annual Operating Results (Aug 2015 to Jul 2016)
The tenant did not give consent to disclose the information.

© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

34

Hotel Details (Kyushu & Okinawa Region)
G-1 Valie Hotel Tenjin
Annual Operating Results (Aug 2015 to Jul 2016)100

Occupancy (le ft, %)ADR (r ight, ye n)

RevPAR (r ight, yen)
12,00090

10,000

80

8,000

70

6,000

60

4,000

50

2,000
Aug 20 15

Nov 20 15

Feb 2016

May 20 16

Newly opened a restaurant and a lounge and began serving breakfast to guests in February 2016
Buffet Restaurant with 24 Seats

Lounge where guests can enjoy free coffee and Wi-Fi© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

35

Hotel Details (Newly-Acquired Assets)
Hokkaido & Tohoku Region: A-3 Comfort Hotel Kushiro
Location
Hotel Type
Guest Rooms
Leasable Area
Structure
Contract
Acquisition PriceAppraisal ValueNOI Yield

Kushiro, Hokkaido
Stay-Only
126
3,1805.58 m 2
RC, 9F
Fixed Rent
300 mm yen
413 mm yen
4.8%

Tokyo Region: C-1 Smile Hotel Tokyo Asagaya
Location
Hotel Type
Guest Rooms
Leasable Area
Structure
Contract
Acquisition PriceAppraisal ValueNOI Yield

Suginami-ku, Tokyo
Stay-Only
112
2,721.70 m 2
RC, B1/5F
Fixed + Variable Rent
3,910 mm yen
3,940 mm yen
4.0%(Note) RC = Reinforced Concrete© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

36

Hotel Details (Newly-Acquired Assets)
Tokyo Region: C-2 Smile Hotel Asakusa
Location
Hotel Type
Guest Rooms
Leasable Area
Structure
Contract
Acquisition PriceAppraisal ValueNOI Yield

Taito-ku, Tokyo
Stay-Only
96
1,793.43 m 2
SRC, 10F
Fixed + Variable Rent
1,920 mm yen
2,020 mm yen
3.7%

Tokyo Region: C-3 Hotel Livemax Nihonbashi-Hakozaki
Location
Hotel Type
Guest Rooms
Leasable Area
Structure
Contract
Acquisition PriceAppraisal ValueNOI Yield

Chuo-ku, Tokyo
Stay-Only
48
853.00 m 2
Steel, 11F
Fixed Rent
1,360 mm yen
1,410 mm yen
3.5%(Note) SRC = Steel-Reinforced Concrete© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

37

Hotel Details (Newly-Acquired Assets)
Hokuriku & Tokai Region: D-3 Comfort Hotel Central International Airport
Location
Hotel Type
Guest Rooms
Leasable Area
Structure
Contract
Acquisition PriceAppraisal ValueNOI Yield

Tokoname, Aichi
Stay-Only
346
11,599.63 m 2
RC, 8F
Fixed Rent
5,308 mm yen
5,770 mm yen
4.0%

Hokuriku & Tokai Region: D-4 Comfort Hotel Suzuka
Location
Hotel Type
Guest Rooms
Leasable Area
Structure
Contract
Acquisition PriceAppraisal ValueNOI Yield

Suzuka, Mie
Stay-Only
105
2,186.65 m 2
Steel, 6F
Fixed Rent
300 mm yen
370 mm yen
5.1%(Note) RC = Reinforced Concrete© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

38

Hotel Details (Newly-Acquired Assets)
Kinki Region: E-5 Nest Hotel Osaka Shinsaibashi
Location
Hotel Type
Guest Rooms
Leasable Area
Structure
Contract
Acquisition PriceAppraisal ValueNOI Yield

Osaka, Osaka
Stay-Only
302
8,057.26 m 2
SRC, 13F
Fixed + Variable Rent
7,600 mm yen
7,660 mm yen
4.6%

Chugoku & Shikoku Region: F-1 Comfort Hotel Okayama
Location
Hotel Type
Guest Rooms
Leasable Area
Structure
Contract
Acquisition PriceAppraisal ValueNOI Yield

Okayama, Okayama
Stay-Only
208
5,543.70 m 2
SRC, 10F
Fixed Rent
1,200 mm yen
1,220 mm yen
4.7%(Note) SRC = Steel-Reinforced Concrete© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

39

Hotel Details (Newly-Acquired Assets)
Chugoku & Shikoku Region: F-2 Nest Hotel Matsuyama
Location
Hotel Type
Guest Rooms
Leasable Area
Structure
Contract
Acquisition PriceAppraisal ValueNOI Yield

Matsuyama, Ehime
Stay-Only
190
6,671.94 m 2
RC, 11F
Fixed + Variable Rent
1,610 mm yen
1,640 mm yen
5.5%

Kyushu & Okinawa Region: G-2 Nest Hotel Naha
Location
Hotel Type
Guest Rooms
Leasable Area
Structure
Contract
Acquisition PriceAppraisal ValueNOI Yield

Naha, Okinawa
Stay-Only
193
9,242.20 m 2
SRC, 11F
Fixed + Variable Rent
3,750 mm yen
3,770 mm yen
4.7%(Note) RC = Reinforced Concrete ; SRC = Steel-Reinforced Concrete© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

40

Portfolio Summary (as of July 31, 2016)
As of July 31, 2016

Hotel

No. byRegion

No.

A-1

004

Nest Hotel Sapporo Ekimae

A-2

008

Nest Hotel Sapporo Odori

D-1

006

Comfort Hotel Hamamatsu

D-2

003

Hotel Wing
International Nagoya

Hokkaido &TohokuHokkaido &TohokuHokuriku &Tokai
Hokuriku &
Tokai

E-1

001

Smile Hotel Kyoto Shijo

Kinki

Stay-Only

E-2

002

Hotel Vista Premio Kyoto

Kinki

Stay-Only

E-3

005

Chisun Inn Osaka Hommachi

Kinki

Stay-Only

E-4

007

Hotel Suave Kobe Asuta

Kinki

Stay-Only

G-1

009

Valie Hotel Tenjin

Kyushu &Okinawa

Stay-Only

Asset

RegionHotel Type

Stay-Only
Stay-Only
Stay-Only
Stay-Only

Contract
Variable +Fixed Rent
Variable +Fixed Rent
Fixed Rent
Variable +Fixed Rent
Variable +Fixed Rent
Variable +Fixed Rent
Variable +Fixed Rent
Variable +Fixed Rent
Variable +Fixed Rent

Location

AcquisitionPrice(mm yen)Book Value(mm yen)

Leasable
Area
(m 2)

Occupancy(%)

Jul 2016 Appraisal
Value(mm yen)

Cap rate(%)

Sapporo

2,160

2,176

5,734.93

100.0

2,260

5.6

Sapporo

1,450

1,484

5,638.78

100.0

1,510

5.5

Hamamatsu, Shizuoka

1,550

1,549

4,173.92

100.0

1,670

5.7

Nagoya

2,670

2,692

5,255.66

100.0

2,810

5.1

Kyoto

4,480

4,513

4,891.84

100.0

4,760

4.9

Kyoto

3,600

3,625

3,867.66

100.0

3,860

4.5

Osaka

1,630

1,648

3,690.00

100.0

1,780

4.6

Kobe, Hyogo

1,490

1,494

4,633.16

100.0

1,620

5.2

Fukuoka

1,380

1,425

1,910.94

100.0

1,900

4.6

20,41020,61039,796.89

100.0

22,1705.0

Subtotal

Below are the prefectures located in each “Region”:
A Hokkaido & Tohoku: Hokkaido, Aomori, Iwate, Miyagi, Akita, Yamagata, & Fukushima Prefectures
B Kanto Koshinetsu: Ibaraki, Tochigi, Gumma, Saitama, Chiba, Kanagawa, Yamanashi, Nagano, and Niigata Prefectures
C Tokyo: Tokyo
D Hokuriku & Tokai: Toyama, Ishikawa, Fukui, Gifu, Shizuoka, Aichi, and Mie Prefectures
E Kinki: Osaka, Hyogo, Kyoto, Shiga, Nara, and Wakayama Prefectures
F Chugoku & Shikoku: Tottori, Shimane, Okayama, Hiroshima, Yamaguchi, Kagawa, Tokushima, Kochi, and Ehime Prefectures
G Kyushu & Okinawa: Fukuoka, Saga, Nagasaki, Kumamoto, Oita, Miyazaki, Kagoshima, and Okinawa Prefectures© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

41

Portfolio Summary (Newly-Acquired Assets)
As of August 17, 2016
No. byRegion

No.

A-3

018

C-1

Asset

Location

AcquisitionPrice(mm yen)Acquisition
Date

Leasable
Area
(m 2)

Occupancy(%)

Kushiro, Hokkaido

300

2016/8/17

3,180.58

Suginami-ku, Tokyo

3,910

2016/8/17

Taito-ku, Tokyo

1,920

Fixed Rent

Chuo-ku, Tokyo

Stay-Only

Fixed Rent

Tokoname, Aichi

Stay-Only

Fixed Rent

Suzuka, Mie

Stay-Only

Variable +Fixed Rent

Stay-Only

Fixed Rent

RegionHotel Type

Comfort Hotel Kushiro

Hokkaido &TohokuStay-Only

012

Smile Hotel Tokyo Asagaya

Tokyo

Stay-Only

C-2

014

Smile Hotel Asakusa

Tokyo

Stay-Only

C-3

016

Tokyo

Stay-Only

Aug 2016 Appraisal
Value(mm yen)

Cap rate
(%)

100.0

413

5.6

2,721.70

100.0

3,940

4.5

2016/8/17

1,793.43

100.0

2,020

4.2

1,360

2016/8/17

853.00

100.0

1,410

4.6

5,308

2016/8/17

11,599.63

100.0

5,770

4.1

300

2016/8/17

2,186.65

100.0

370

5.1

Osaka

7,600

2016/8/17

8,057.26

100.0

7,660

4.6

Okayama

1,200

2016/8/17

5,543.70

100.0

1,220

5.4

Matsuyama, Ehime

1,610

2016/8/17

6,671.94

100.0

1,640

5.8

Naha, Okinawa

3,750

2016/8/17

9,240.20

100.0

3,770

5.4

Subtotal: 10 Newly-Acquired Assets

27,25851,848.09

100.0

28,213

4.7

Total of 19 Assets: 9 Portfolio Assets as of July 31, 2016＋10 Newly-Acquired Assets

47,66891,644.98

100.0

50,383

4.8

Hotel Livemax
Nihombashi-Hakozaki
Comfort Hotel
Central International Airport

D-3

011

D-4

019

Comfort Hotel Suzuka

E-5

010

Nest Hotel
Osaka Shinsaibashi

F-1

017

Comfort Hotel Okayama

F-2

015

Nest Hotel Matsuyama

G-2

013

Nest Hotel Naha

Hotel

Contract

Hokuriku &Tokai
Hokuriku &
Tokai
Kinki
Chugoku &Shikoku
Chugoku &Shikoku
Kyushu &Okinawa

Stay-Only
Stay-Only

Fixed Rent
Variable +Fixed Rent
Variable +Fixed Rent

Variable +Fixed Rent
Variable +Fixed Rent

© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

42

Individual Hotel Financialsは当初予想より9.4%上昇(thousand yen)No.

Property(A)

Real EstateManagement
Revenue

Total

774,959

A-1

A-2

D-1

E-1

E-2

E-3

G-1

Nest Hotel
SapporoEkimaeNest Hotel
SapporoOdori

ComfortHotel
Hamamatsu

Smile Hotel
Kyoto Shijo

Hotel Vista
Premio Kyoto

Chisun Inn
Osaka
HommachiValie Hotel
Tenjin99,62879,99355,571

179,248

75,00057,78761,227

166,503

Other

Fixed Rent

387,253

31,12923,76655,36130,33175,00036,00021,664

114,000

Variable Rent

351,895

68,49855,776

0148,916

0

21,78739,563

17,352Other Rent

35,810

0

450

209

0

0

0

0

35,150Real EstateManagement
Expenses

75,243

7,640

11,081

5,526

6,420

9,536

4,632

4,513

25,891

Outsourcing
Fees

6,594

600

600

600

600

1,475

915

600

1,204

Taxes

48,189

5,113

8,308

4,362

4,783

6,875

3,131

3,212

12,403

Insurance

1,113

155

164

101

159

107

105

56

263

RepairExpenses &Equipment

4,749

1,348

1,582

200

510

661

112

276

60

Other
Expenses

14,595

423

426

263

367

418

368

368

11,960(C) NOI(A)-(B)

699,715

91,987

68,91150,044

172,827

65,46353,15556,713

140,611(D) Depreciation

101,315

11,951

15,135

14,29815,28812,337

4,184

7,774

20,345(E) Net Rental
Income(C)-(D)598,399

80,036

53,77635,746

157,539

53,126

48,97048,938120,266(B)

Rents for Hotel Wing International Nagoya, Hotel Suave Kobe Asuta, and retail rents are included in “Other,” as the tenants did not provide consent todisclose the data.
© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

43

Contractual Terms and RevPAR, ADR, & Occupancy Trends
Contractual Terms(thousand yen)

January 2016
Revenue
Fixed Rent

July 2016

Ratio

Revenue

Ratio

131,07966.2%

423,063

54.6%

Fixed Rent from Each Tenant

119,61660.4%

387,253

50.0%

Other (Rent from Retail Tenants)

11,463

5.8%

35,810

4.6%

66,87033.8%

351,895

45.4%

197,950

100.0%

774,959

100.0%

Variable Rent
Total
Operating Results (Aug. 2015 - Jul. 2016)
Occupancy (left, %)ADR (right, yen)

RevPAR (right, yen)

(yen)

100%

12,00090%

10,000

80%

8,000

70%

6,000

60%

4,000

50%

2,000

40%

0
Aug
2015

Sep

Oct

Nov

Dec

Jan
2016

Feb

Mar

© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Apr

May

Jun

Jul

44

Hotel Market Environment© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

45

Hotel Market Environment (1)Trends in Number of Guests per Region of Portfolio Asset(1,000 persons)(1,000 persons)Hokkaido

5,000

5,000

4,000

4,000

2,000

1,802

2,180

3,000

4,070

2,937

2,000

1,212

1,000

0
Jan-Jun
201 4(1,000 persons)

Jan-Jun
201 5

Jan-Jun
201 6

4,000

3,000

3,000

Jan-Jun
201 5

Jan-Jun
201 6

5,000

4,000

4,000

4,000

3,000

3,000

3,000

2,000

0

47
Jan-Jun
201 4(1,000 persons)

100

120

1,000

790

1,013

2,000

Jan-Jun
201 5

Jan-Jun
201 4

Jan-Jun
201 6(1,000 persons)Okayam a

Jan-Jun
201 5

Jan-Jun
201 6

5,000
3,044

1,811

1,000

0

0
Jan-Jun
201 4

Jan-Jun
201 5

Jan-Jun
201 6

5,000

4,000

4,000

4,000

4,000

3,000

3,000

3,000

3,000

2,000

2,000

2,000

33
0

1,000
0

Jan-Jun
201 4

Jan-Jun
201 5

Jan-Jun
201 6

1,000
19

33

50

Jan-Jun
201 4

Jan-Jun
201 5

Jan-Jun
201 6

Hyogo

245

407

394

Jan-Jun
201 4

Jan-Jun
201 5

Jan-Jun
201 6(1,000 persons)

Fukuoka

5,000

94

Jan-Jun
201 6

2,000

5,000

53

Jan-Jun
201 5

3,000

5,000

1,000

867

4,000
2,498

(1,000 persons)

Ehim eJan-Jun
201 4

1,000
Jan-Jun
201 6

834
471

(1,000 persons)

Osaka

1,126

0

1,000
0

Jan-Jun
201 5(1,000 persons)

Kyoto

5,000

1,000

726

262
Jan-Jun
201 4

5,000

2,000

2,000
733

0
Jan-Jun
201 4(1,000 persons)

Mie

4,000

1,000

Aichi

5,000

2,000

1,000

0

(1,000 persons)Shizuoka

5,000
3,917

3,000

(1,000 persons)Tokyo

Okinaw a

2,000
678

904

Jan-Jun
201 5

Jan-Jun
201 6

387

0

1,000

599

886

986

Jan-Jun
201 4

Jan-Jun
201 5

Jan-Jun
201 6

0Jan-Jun201 4

Note: Data prepared by Ichigo Investment Advisors based on Japan Tourism Agency’s “Statistical Survey of Travelers” (lodging facilities with ten ore more employees)© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

46

Hotel Market Environment (2)Record-High 20mm Inbound Tourists Visited Japan in 2015, with 2016
Seeing Continued Growth
No. of Guests Staying at Domestic Hotels

No. of Inbound Tourists(mm persons)(mm persons)

500

100

450

80

■ Government Target
382

400
349
350

310

339

396

420

60
60

360

40

301

40

300

20
20

250
200

6

8

10

2011

2012

2013

13

2014

0
2008

2009

2010

2011

2012

2013

2014

2015

2015

Inbound Tourist Ratio by Prefecture (2015)

Inbound Tourist Expenditure Trends

(%)
30.0

(billion yen)

2020

（thousand yen）

4,000

■ Prefectures where Ichigo Hotels

25.0

are located.

20.6

2030

3,477

Expenditure (left)
151
Expenditure per Person (right)

3,000

176

200

150

20.0
15.0

13.5

2,000

131

130

5.0
0.0

2,028
100

1,417

9.9
10.0

137

7.1

5.5

1,086
5.2

4.2

4.1

3.8

3.7

1,000

814

50

0

0
2011

2012

2013

2014

2015

Note: Data prepared by Ichigo Investment Advisors based on Japan Tourism Agency’s “Statistical Survey of Travelers” (lodging facilities with ten ore more employees)© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

47

Additional Loan Details© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

48

Loan Details (1)As of July 31, 2016
Balance(mm yen)

Borrowing Rate

Drawdown Date

Maturity Date

SMBC,Mizuho, Shinsei, Resona

3,250

0.63182%

November 30, 2015

November 30, 2018

SMBC, Mizuho,Shinsei,Resona

5,250

1.08000%

November 30, 2015

November 30, 2020

8,500

Average 0.91%

Borrowing

LenderTerm Loan I

Term Loan II
Total

As of August 17, 2016
Balance(mm yen)

Borrowing Rate

Drawdown Date

Maturity Date

SMBC,Mizuho,Shinsei,Resona

3,250

0.63182%

November 30, 2015

November 30, 2018

Term Loan II

SMBC,Mizuho,Shinsei,Resona

5,250

1.08000%

November 30, 2015

November 30, 2020

Term Loan III

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

2,000

0.58182%

August 17, 2016

February 29, 2020

Term Loan IV

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

4,500

0.90750%

August 17, 2016

February 28, 2023

Term Loan V

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

4,500

0.98500%

August 17, 2016

August 31, 2023

19,500

Average 0.89%

Borrowing

LenderTerm Loan I

Total© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

49

Loan Details (2)Contractual Terms

Lender Formation(As of July 31, 2016)(As of August 17, 2016)
Bank of Fukuoka
3%(As of July 31, 2016)(As of August 17, 2016)

Variable
Rent
38%

Variable
Rent
27%

Nishi-Nippon City
3%

Resona10%

Resona11%
Shinsei
15%

SMBC
40%

SMBC
39%

Shinsei
12%

Mizuho
35%

Fixed
Rent
62%

Fixed
Rent
73%

Mizuho33%

Distribution of Loan Maturity Dates(mm yen)
6,000
5,000

■ Loans as of July 31, 2016
■ New Loans on August 17, 2016

5,250
4,500

4,500

Jul 2023

Jan 2024

4,000
3,250

3,000
2,000

2,000
1,000
0
Jan 2017

Jul 2017

Jan 2018

Jul 2018

Jan 2019

Jul 2019

Jan 2020

Jul 2020

Jan 2021

Jul 2021

Jan 2022© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Jul 2022

Jan 2023

50

Portfolio Strategy/Asset Acquisition/Shareholder Composition© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

51

Ichigo Hotel REIT Portfolio Strategy
Initial Focus Primarily on Stay-Only Hotels that Deliver Both Earnings
Stability and Income Growth
Growth Potential

Full-Service Hotels
Located in or near train stations, tourist destinations, business centers,

Resort Hotels
Located in tourist destinations and/or
near major tourist attractions, thesegovernment offices, shopping districts, and other areas of high customer
traffic, these hotels offer a full line of services and facilities such as inhouse restaurants, bars, convention centers, business support centers, etc.

are hotels with in-house restaurants,
banquet halls, convention centers,
sports facilities, and other such

Stay-Only Hotels（Initial Focus)

facilities

Located near train stations, airports, business centers,
major thoroughfares, shopping centers, and other areas ofhigh customer traffic, these hotels primarily service travelers

Other Options
Overnight options such as serviced

as places to stay at very attractive rates, without extraneousbanquet facilities, etc.

apartments, Japanese-style inns
(ryokan), capsule hotels, etc.

Stable Revenue© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

52

Hard/Soft Factors Considered in Asset Acquisitions
Hard

Location Competitiveness
LocationIs the asset located near an airport, train station, business center, etc., and is it likely there will be sufficientregular customer traffic?

Hard

Building

Physical Condition of Building
What is the physical condition of the asset and how well has it been maintained? Is the physical conditioncompetitive when compared to other similar assets?

Hard

Value-Add
Opportunity

Opportunity to Benefit from Ichigo Value-Add ExpertiseWill Ichigo be able to deploy its value-add capabilities to create a stable and/or growing revenue stream?

Soft

Operator

Skill and Track Record of Operator
What are the likely capabilities of the operator and is the operator well-positioned to maintain stable income
and/or increase revenue in the future?

Soft

Cash Flow
AnalysisAnalysis of Cash Flows and Rental Terms
How will the amount and timing of expected cash flows from the asset affect the portfolio as a whole? Are
the current rental terms optimal?

© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

53

Shareholder Composition (as of July 31, 2016)
Major Shareholders

Shares Held by Shareholder Type
Name

Shares%1

Japan Trustee Services Bank, Ltd., Trust Account2

Trust & Custody Service Bank, Ltd., Securities Investment
Trust Account

18,05413%

3

The Master Trust Bank of Japan, Trust Account10,0747%

4

Ichigo Inc. (Sponsor)

6,500

5%

5

Ichigo Trust Pte. Ltd.

6,424

5%

5,934

4%

4,299

3%

6
7

24,975

CREDITSUISSE SECURITIES (EUROPE) LIMITED
MAIN ACCOUNTThe Nomura Trust and Banking Co., Ltd., Investment Trust
Account

18%

8

MSCO CUSTOMER SECURITIES

3,922

3%

9

CBLDN STANDARD LIFE INVESTMENT COMPANY II GLOBAL REIT FUND

3,306

2%

10

Fukoku Mutual Life Insurance Company

2,800

2%

86,28862%

Total

Foreign
Corporations& Individuals
42,227

Domestic
Corporations
15,461

Domestic
Individuals& Others
18,104

Financial
Institutions
62,708

Number of Shareholders

Domestic
Individuals& Others
3,339
Foreign
Corporations& Individuals
56
Domestic
Corporations
90
Financial
Institutions
19© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

54

Ichigo Hotel REIT Overview
Investment Corporation
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 & Representative
Statutory Executive
Director

Wataru Orii

Ichigo Real Estate Investment Advisors changed its corporate name to Ichigo Investment Advisors Co., Ltd. on September 1, 2016.

© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

55

MEMO

© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

56

MEMO

© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

57

MEMO

© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

58

Disclaimer
These materials are for informational purposes only, and do not constitute or form a part of, and should not be construed as, anoffer to sell or a solicitation of an offer to buy any securities of Ichigo Hotel REIT Investment Corporation (Ichigo Hotel REIT).
These materials may contain forward-looking statements regarding the intent, belief or current expectations of management of
Ichigo Hotel REIT with respect to financial conditions and future results of operations. These statements are based on certain
assumptions founded on currently available information. Accordingly, such statements are subject to risks, uncertainties andassumptions and there is no assurance as to actual financial conditions or results of operations. Actual results may vary fromthose indicated in the forward-looking statements. Accordingly, please refrain from solely relying on these statements.
These materials have been created by the management of Ichigo Hotel REIT and Ichigo Investment Advisors Co., Ltd. (IIA) withthe belief that the information contained is accurate. However, there is no assurance given as to the accuracy, certainty, validity
or fairness of any such information. Please note that the content of these materials is subject to revision or retraction without
prior notice.
This document is a translation. If there is any discrepancy between the original Japanese version and the English translation, theoriginal Japanese version shall prevail. No copying or reproduction of these materials or part of these materials is allowed withoutobtaining prior consent from Ichigo Hotel REIT and IIA.

Ichigo Hotel REIT IR Desk
TEL：03-3502-4892 FAX：03-3502-4876
IR_Hotel@ichigo.gr.jp
www.ichigo-hotel.co.jp/english
Ichigo is Japan’s first zero-carbon listed real estate company. We are taking
responsibility for our environmental footprint by offsetting our carbon emissions
and investing in low-carbon technologies such as solar energy.

© 2016 Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

59