Ichigo Hotel (3463)

Ichigo Hotel July 2020 Fiscal Period
Corporate Presentation
September 14, 2020

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/english

We would like to express our deepest condolences
to all those across the world affected by the Covid-19
pandemic and to all those in Japan affected by
Typhoon Haishen (aka Typhoon No. 10), and ourwishes for the earliest possible recovery.

© 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.

July 2020 Results July 2020 Highlights
 July 2020 Earnings Breakdown Operating Results Down YOY due to
Covid-19 Impact
 RevPAR Down by Over 50% in All Areas
 Covid-19 Response Ichigo J.League Shareholder Program

Actions to Drive Earnings Growth Achieving Organic Rent Growth atContract Renewals
 Operator Change to Generate Higher
Earnings (1) Operator Change to Generate Higher
Earnings (2) Highly-Stable, Diversified Hotel Portfolio Portfolio Lease Details
 Portfolio Growth Opportunity via Ichigo
Sponsor Support
 No Fixed Fee, Performance Fee-Only
Structure Directly Linked to Shareholder
Value Creation

January 2021 and July 2021 Forecasts
 Market Environment & Forecast Assumptions
 January 2021 Forecast
 July 2021 Forecast

Ichigo’s Commitment to ESG Ichigo Sustainability Policy
 Ichigo ESG – Environmental
 Ichigo ESG – Social
 Ichigo ESG – GovernanceAppendices Portfolio Details
 Loan Details & Shareholder Composition Growth Roadmap, Sponsor, Shareholder
Alignment© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

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July 2020 Results© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

7

July 2020 Highlights
Results
Net Income

JPY 170M-JPY 633M (-78.8%) YOY

JPY 2,556 (11 variable rent hotels)

Details• No variable rent from March to July
• Reached agreement with one operator to reduce its
current rent & adjust upward its forward variable rent

-JPY 5,024 (-66.3%) YOY• Occupancy: 49.0% (vs. 90.5% in previous period)• ADR: JPY 5,220 (vs. JPY 8,375 in previous period)

NOI

JPY 787M• NOI down on no asset sales and lower variable rents

FFO

JPY 2,009

Dividend

JPY 670

RevPAR

NAV-JPY 825M (-51.2%) YOY-JPY 2,487 (-55.3%) YOY• FFO down on lower NOI-JPY 2,484 (-78.8%) YOY• -JPY 203 (-23.3%) vs. revised forecast announced on
April 27

JPY 132,668• Total unrealized gains: +JPY 2.2B

-JPY 8,171 (-5.8% 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.

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July 2020 Earnings Breakdown(JPY million)

July 2019
ActualForecast (B)(Announced
Apr 2020)

Jul 2020
Actual (A)vs. Forecast(A) - (B)

Major Variation Factors (vs. Forecast)

Operating Revenue

1,789

953

1,038

-85

Variable Rent

735

-25

41

-66

Variable rent adjustment: -66

Fixed Rent

984

935

953

-18

Decrease in fixed rent: -18

Other (Gains on Sales, etc.)

70

42

43

–

797

581

607

-25

Repair & Maintenance

18

21

31

-10

Depreciation

328

336

338

-2

Operating Profit

992

371

431

-60

Recurring Profit

805

171

223

-51

Net Income

804

170

222

-51

Dividend

JPY 3,154

JPY 670

JPY 873-JPY 203

FFO

JPY 4,496

JPY 2,009

–

–

NOI

1,611

787

863

-76

Post-Depreciation NOI

1,283

450

525

-74

256

128

356

-228

54,98452,294––

Operating Expenses

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

Effective cost controls-23.3% vs. forecast-78.8% (-JPY 2,484) YOY

Effective cost controls

9Operating Results Down YOY due to Covid-19 Impact
Variable Rent Hotels (11 Hotels)
Feb 1, 2019
- Jul 31, 2019

Feb 1, 2020
- Jul 31, 2020

ChangeO

YOY

Room Revenue (JPY M)

2,424

610

-1,814-74.8%

Total Revenue (JPY M)

2,742

707

-2,034-74.2%

RevPAR (JPY)

7,581

2,556

-5,024-66.3%

Occupancy

90.5%

49.0%

-41.5%-45.9%ADR (JPY)

8,375

5,220

-3,154-37.7%

Total Portfolio (18 Hotels)
Feb 1, 2019
- Jul 31, 2019

Feb 1, 2020
- Jul 31, 2020

ChangeYOY

Room Revenue (JPY M)

3,764

1,059

-2,705-71.9%

Total Revenue (JPY M)

4,120

1,172

-2,947-71.5%

RevPAR (JPY)

7,010

2,335

-4,675-66.7%

Occupancy

88.8%

44.3%

-44.5%-50.1%ADR (JPY)

7,895

5,267

-2,628-33.3%* Excludes Hotel Wing International Kobe Shin Nagata Ekimae, Valie Hotel Hiroshima, HOTEL EMIT SHIBUYA, Grandpark-Inn Yokohama, andWashington Hotel Plaza Shimonoseki Eki Nishi. Operating results before acquisition are based on data provided by previous owner.
© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

10

RevPAR Down by Over 50% in All Areas
18 Hotels (excludes Grandpark-Inn Yokohama, Hotel Wing
International Kobe Shin Nagata Ekimae, Valie Hotel Hiroshima,
HOTEL EMIT SHIBUYA, and Washington Hotel Plaza
Shimonoseki Eki Nishi)

YOY by Region (Feb 2020 – Jul 2020)
RevPAR

Occupancy

Total Portfolio

ADR

Hokkaido

Tokyo

Tokai/
Chubu

Kyoto

Osaka

Chugoku/
Shikoku

Kyushu

-16%
-34%

-37%

-25%

-22%

-30%
-40%
-44%

-42%
-50%

-50%

-46%

-37%
-42%

-54%
-63%
-67%

-69%

-69%

-66%

-74%

-63%

-64%

-81%
(JPY)

RevPAR

2,940

3,740

1,967

2,629

1,326

2,344

2,258

No. Hotels

3

2

4

1

2

4

2

% of Total
Portfolio Rental
Income

7%

8%

30%

3%

11%

19%

5%

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

11

Covid-19 Response
Safety Measures and Services for Guests− Hand sanitizers, periodic disinfections, and mandatory mask-wearing for
employees− Confirming guest and staff health− Offering remote work options

Temporarily Closed 9 Hotels during Nationwide State of Emergency
Hotel
Smile Hotel Kyoto Shijo
Chisun Inn Osaka Hommachi
Nest Hotel Osaka Shinsaibashi
Hotel Wing International Nagoya
Grandpark-Inn Yokohama
Valie Hotel Tenjin
Court Hotel Kurashiki
Urbain Hiroshima Executive
Valie Hotel Hiroshima

Date Closed
April 13, 2020
April 17, 2020
April 17, 2020
April 18, 2020
April 19, 2020
May 1, 2020
May 1, 2020
May 7, 2020
August 17, 2020
May 10, 2020

StatusReopened on July 1, 2020
Scheduled to reopen on October 1, 2020
TBD
Reopened on June 1, 2020
Reopened on June 1, 2020
Reopened on August 1, 2020
Reopened on September 1, 2020
Reopened on May 28, 2020
TBD
Scheduled to reopen on September 15, 2020

Asset Management Company Safety Measures− Remote work from March 2020
− Social distancing at office via flextime and limiting office utilization to 30-40%© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

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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 YieldCo that it manages, in its shareholder program(55,000 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.
FY20/2 Shareholder Program- Free tickets for 85 games- c. 400 tickets(Program started mid-season)

Ichigo Kids J.League Events- c. 350 participants
 Escort players onto field Join pre-match warm-ups
 High-fives with players
 Carry club flags
 Unfurl center-circle flags© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

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Actions to Drive Earnings Growth© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

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Achieving Organic Rent Growth at Contract Renewals
Negotiating Higher Rents at Contract Renewals to Drive Organic Growth

Plan

ActualTimingHotel Name

Lease Terms

ChangesJun 2017

Chisun Inn Osaka Hommachi

Variable+Fixed
Rent

Renewal atHigher Rent

• Increased fixed rent
• Increased variable rent

Mar 2019

Hotel Wing International Kobe Variable+Fixed
Shin Nagata Ekimae
Rent

Rebranding• Increased fixed rent
• Added variable rent

Jun 2019

Nest Hotel (4 Hotels)

Variable+Fixed
Rent

Renewal atHigher Rent

• Increased fixed rent

Sep 2019

Valie Hotel Hiroshima

Variable+Fixed
Rent

Rebranding• Rebrand and reopen• Added variable rent

Jun 2020

Smile Hotel Tokyo Asagaya

Variable+Fixed
Rent

Lease Expiry• Increased fixed rent
• Increased variable rent

Oct 2020

Comfort Hotel Okayama

Fixed Rent

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

Oct 2020

Valie Hotel Tenjin

Variable+Fixed
Rent

Rebranding• Operator change to Hakata Hotels• Revised variable rent clauseFeb 2021

Grandpark-Inn Yokohama

Fixed Rent

Rebranding• Added GOP-linked variable rent

2020~2021

3 Hotels

Variable+Fixed
Rent

Lease Expiry• Operator to be selected from among

multiple candidates, including the current
operator

Previous: Increased revenue by revising leases upon renewal to current market rents
Current: Early lease terminations by operators and rent reduction & variable-rent only contract requests upon lease renewal are increasing© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

15

Operator Change to Generate Higher Earnings (1)Valie Hotel Tenjin−−−−

Hotel operator change from third-party operator to Ichigo-owned Hakata Hotels
Scheduled to rebrand and reopen as The OneFive Fukuoka Tenjin
Revising variable rent component of lease to increase earnings upside on top of fixed rent
Deploying Ichigo’s PROPERA AI-based hotel revenue management system (operating trackrecord: Earnings +10-40%) to drive higher earnings & customer satisfaction
Hakata Hotels
Name

Hakata Hotels Inc.

Address

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

Representative

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

Establishment
Date

March 2019

Paid-In Capital

Scheduled to rebrand and reopen as The OneFive Fukuoka Tenjin on
October 10, 2020. Minimum guaranteed rent will temporarily be zero
between October 1, 2020 to January 31, 2021.

Relationship to
Ichigo Hotel/IIA© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

JPY 10 million(100% Ichigo group subsidiary)

Consolidated subsidiary of Ichigo Investment Advisor’s
parent company, Ichigo(Hakata Hotels is a related party as defined in the
Ordinance of the Investment Trust and Investment
Corporation Law and IIA’s internal rules)

16

Operator Change to Generate Higher Earnings (2)Grandpark-Inn Yokohama− Hotel operator change to nine hours Inc. (currently operates 16 capsule hotels and 6
standard hotels)− Will be rebranded (New hotel name to be determined)− New lease adds GOP-linked variable rent to current fixed rent-only lease (GOP = Gross
Operating Profit)
nine hours
Namenine hours Inc.

Address

3-19-1 Kanda Nishikicho, Chiyoda-ku, Tokyo

Representative

Keisuke Yui, Representative Director & Founder
Takahiro Matsui, Representative Director & CEO

Establishment
Date

August 2013

Paid-In Capital

JPY 45 million

Principal
Business
Relationship to
Ichigo Hotel/IIA

Planning, development, operations of capsule hotels
and related consulting services
None* Scheduled to rebrand and reopen on February 1, 2021

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

17

Highly-Stable, Diversified Hotel Portfolio
Geographic Diversification
November 30, 2015 (IPO)

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

July 31, 2019

July 31, 2020

Yokohama
Kobe
2.7%
2.7%
Nagoya
4.9%
Kyushu
Osaka
6.6%
16.9%
Okinawa
6.9%
Hokkaido
7.2%
Tokyo
9.7%

Kyoto
39.6%

Hokkaido
17.7%
Tokai
7.6%

Yokohama
Nagoya 2.9%
5.1%
Kyushu
6.9%

Kobe
2.9%

Osaka
17.8%

Hokkaido
7.5%

Kyoto
14.8%

Kyoto
8.6%
Chugoku/
Shikoku
17.2%

Tokyo
17.3%

Chugoku/
Shikoku
Tokai
14.4%
13.1%

Tokai
13.8%

Acquisition-price basis
HotelsBreakdown

Portfolio Size

9 Hotels

Osaka 1, Kyoto 2, Tokai 1,
Hokkaido 2, Kyushu 1,
Nagoya 1, Kobe 1

JPY 20.4B

HotelsBreakdown

Portfolio Size

23 Hotels
Osaka 2, Kyoto 2,
Chugoku/Shikoku 5,
Tokai 3, Tokyo 2,
Hokkaido 3, Okinawa 1
Kyushu 2, Nagoya 1,
Yokohama 1, Kobe 1
JPY 54.4B© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

HotelsBreakdown

Portfolio Size

23 Hotels
Osaka 2, Kyoto 1,
Chugoku/Shikoku 6,
Tokai 3, Tokyo 3,
Hokkaido 3, Kyushu 2,
Nagoya 1, Yokohama 1,
Kobe 1
JPY 51.9B

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Portfolio Lease Details
Stability

Lease Term

UpsideFixed Rent

Fixed + Variable Rent

Total

Contract

Lease

Lease

Lease

–

Fixed Rent

Yes

Yes

Yes

–

Variable Rent–

Fixed Portion of Revenue
UpsideFixed Portion of Hotel GOP–

Rental Income(Jan 2020 Actual)

JPY 462M(50.8%)

JPY 129M(14.2%)

JPY 318M(34.9%)

JPY 910M(100%)

Number of Hotels

9 Hotels

3 Hotels

11 Hotels

23 Hotels

Total AcquisitionPrice

JPY 14.39B(27.7%)

JPY 5.79B(11.2%)

JPY 31.74B(61.1%)

JPY 51.91B(100%)

Comfort Hotel Kushiro
Comfort Hotel Hamamatsu
Comfort Hotel Central
International Airport
Comfort Hotel Suzuka
Comfort Hotel Okayama
Grandpark-Inn Yokohama
Hotel Livemax NihombashiHakozaki
Urbain Hiroshima Executive
Washington Hotel Plaza
Shimonoseki Eki Nishi

Hotel Wing International Nagoya
Hotel Wing International Kobe
Shin Nagata Ekimae
Chisun Inn Osaka Hommachi

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
Valie Hotel Tenjin
Court Hotel Kurashiki
HOTEL EMIT SHIBUYA

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

–

19

Portfolio Growth Opportunity via Ichigo Sponsor Support
19 Hotels (JPY 60.7B) in Ichigo Sponsor Pipeline as of May 31, 2020
− Lodging-focused hotels across Japan− Locations: Major cities such as Hokkaido, Tokyo, Yokohama, Osaka, and Fukuoka

Fukuoka
Hokkaido
Tokyo
Osaka

Fukuoka

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

20

No Fixed Fee, Performance Fee-Only Structure Directly
Linked to Shareholder Value Creation
Upon AGM Approval, Gains on Merger Performance Fee and Gains on REITTOB Sale Performance Fee to be Introduced− Gains on Merger Performance Fee: Directly linked to shareholder value creation,
paid when Ichigo Hotel merges with another investment corporation− Gains on REIT TOB Sale Performance Fee: Directly linked to shareholder value
creation, paid when Ichigo Hotel is acquired by a third party via a TOB
Before(until Jan 31, 2021)

Earnings-Based

Asset Management Fee Structure

After(from Feb 1, 2021)

NOI & Dividend
Performance Fee

DPS * NOI

X

0.0036%0.0036%

Unchanged

Gains on Sale
Performance Fee

Gains on Sale

X

15%

15%

Unchanged

Gains on Merger
Performance Fee

Gains per Share *No. of Shares Outstanding

X

–

15%

New

Gains on REIT TOB Sale
Performance Fee

Gains per Share *No. of TOB Shares

X

–

15%

New

Notes:
Assumes amendments to the Articles of Incorporation are approved at the October 24, 2020 AGM. Fee amendments are effective February 1, 2021.
Gains on Sale Performance Fee has a high-water mark, such that it will only be paid if the cumulative sum of all of Ichigo Hotel’s Gains/Losses on Sales to-date are positive.
Gains on Merger Performance Fee will only be paid if the merger share price is higher than net assets per share.
Gains on REIT TOB Sale Performance Fee will only be paid if the TOB share price is higher than net assets per share.
© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

21

January 2021 and July 2021 Forecasts© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

22Market Environment & Forecast Assumptions
Hotel Market Remains Uncertain− Hotel demand is recovering in certain areas, but not enough to significantly drive
ADR− Assuming variable rents will recover from the July 2021 fiscal period

Occupancy and ADR Forecasts for 15 Variable Hotels− Forecasting Occupancy at 60-70% & ADR at 50-60% of 2019 levels
January 2021
Occupancy
ADR(Reference)
Occupancy
ADR

July 2021

55.8%

63.6%

JPY 4,609

JPY 4,954

January 2019 Actual*

July 2019 Actual*

91.2%

89.7%

JPY 8,919

JPY 8,668* Actual data of 12 hotels for January 2019 fiscal period and 13 hotels for July 2019 fiscal period

Increasing Importance of Monitoring Operators’ Ability to Pay Rent
− Government assistance and bank loans available during state of emergency− Increasing possibility of rent deferrals & early lease rent terminations© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

23

January 2021 Forecast
Dividend -90.5% YOY(JPY million)
Jan 2021
Previous Forecast(July 2020)

Jan 2020
Actual (A)Jan 2021
Revised
Forecast (B)Major Factors for Variation(B) - (A)Operating Revenue

3,561

1,107

1,037

-2,523

Variable Rent

564

38

18

-545

Forecast RevPAR at 15 variable rent hotels: JPY 2,571 (-59.5% YOY)

Fixed Rent

993

1,026

975

-18

Increase due to acquisitions & sales: +2
Increase due to revised lease contract (Asagaya): +30
Decrease due to revised lease contracts (Okayama, Tenjin): -25

2,003

43

43

-1,959

1,226

635

618

-607

Repair & Maintenance

26

35

30

+3

Depreciation

352

337

342

-9

Operating Profit

2,334

472

418

-1,915Recurring Profit

2,132

259

203

-1,928Net Income

2,130

259

202

-1,927

Dividend

JPY 8,356

JPY 1,015

JPY 795

FFO

JPY 2,129

JPY 2,359

JPY 2,138+JPY 9

NOI

1,438

914

855

-583

Post-Depreciation NOI

1,086

576

512

-573

257

310

449

+192

Other
Operating Expenses

Capex

Decrease due to sales: -1,945
Decrease in rent due to sales: -15
Decrease in asset-related expenses due to acquisitions & sales: -10
Decrease in exemption of consumption tax: -77
Decrease in AM fee: -535

Increase in borrowing-related expenses on acquisitions: +18
Decrease due to amortization of new share issuance expenses: -5-21.7% (-JPY 220) vs. previous forecast-JPY 7,561 -90.5% YOY© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

24

July 2021 Forecast
Dividend +31.5% YOY(JPY million)

Jul 2020
Actual (A)Jul 2021
Forecast (B)Major Factors for Variation(B) - (A)Operating Revenue

953

1,041

+88

Variable Rent

-25

53

+79

Fixed Rent

935

944

+8

Other

42

43

–

581

618

+36

Repair & Maintenance

21

26

+4

Depreciation

336

343

+7

Operating Profit

371

423

+52

Recurring Profit

171

225

+54

Net Income

170

224

+53

JPY 670

JPY 881FFO

JPY 2,009

JPY 2,229+JPY 220

NOI

787

859

+72

Post-Depreciation NOI

450

516

+65

Capex

128

707

+578

Operating Expenses

Dividend

Forecast RevPAR at Variable Rent Hotels: JPY 3,152 (+24.2% YOY)
Increase due to new lease contracts (Tenjin, Yokohama)： +20
Decrease due to sale (Naha): -7
Increase due to acquisitions & sales: +35
Decrease due to revised lease contracts (Tenjin, Asagaya, Okayama,
Yokohama): -27
Increase in property tax due to acquisitions & sales: +10
Increase in AM fee: +9

Increase due to acquisitions & sales: +7+JPY 211 +31.5% YOY

Rebranding and renewal capex (forecast)© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

25

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

26

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.

27

Ichigo ESG – Environmental
Sustainable Real Estate
Preserve & Enhance Existing Buildings
to End Wasteful Demolish & Rebuild‒ Lengthen useful life of existing real estate‒ Shrink footprint by reducing demolition
waste and use of raw materials, energy,
and human effort for construction

DemolishLowestImpactHighestEfficiency

Solar and Wind Energy: Safe and Clean
Annual Power Generation
158,586,005 kWh

Annual CO2 Reduction
104,666,758 kg
Equivalent to annual
CO2 emission of
45,507 cars

Equivalent to annual
energy consumption of
52,862 households
The Federation of Electric Power
Companies of Japan
Annual energy consumption per household
3,000kWh

Ministry of Environment
Annual CO2 emission per car c. 2,300kg(July 2019 to June 2020 – Total of Ichigo
and Ichigo Green)

Environmental Certifications

Natural Disaster Response
No injuries or damages at any Ichigo asset or power
plant from recent natural disasters
Robust Assets- Real estate: continuous improvements to safety & functionality via
value-add capex- Power plants: site selection and construction based on detailed
specifications customized to local geography
Robust BCP & Real-time Response- Pre-typhoon preventative measures (water shielding, sandbags,etc.) & on-site checks- Overwhelming priority is safety of tenants: on-the-groundconfirmation & on-the-ground response- Ichigo engineering team immediate response: same day on-site
safety and engineering inspections to prevent secondary damage
and losses- Developed & deployed proprietary Susport software system forreal-time information sharing & emergency response

CASBEE(Comprehensive Assessment System
for Built Environment Efficiency)
S rankA rank• Ebisu Green Glass• Ichigo Sakaisuji Honmachi Building• Ichigo Sendai East Building• Ichigo Kanda Nishikicho Building• Ichigo Ikenohata Building

IchigoTakamatsu
Building

IchigoMarunouchi
Building

Ichigo Office (8975)

Green Star(Highest Ranking)3 years in a row

Other Certifications
BELS (Building-housing Energy-efficiency Labeling System),
DBJ Green Building© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

28

Ichigo ESG – Social
SportsSupport National &World-Class Athletes‒ Weightlifting‒ Riflery‒ Track & Field

Arts
Paralym Art Sponsor- Support artists withdisabilities“Hiromi Miyake”
by Kenji Ino

Weightlifter
Hiromi Miyake“Re Born: Cheers to
Value-Add”
by SakuraChildren’s Cancer
Treatment
Support University of Miyazaki
Faculty of Medicine’s Programfor Children‒ Ichigo subsidiary Miyako City
issued CSR bond & donated a
portion of underwriter commission
to the Cancer Program‒ Providing ongoing sponsorship ofvolunteer activities in support ofchildren with cancer

Local Communities
Promote Community Development via Sponsorship of
J.League (Only Top Partner with Real Estate Expertise)Strengthen Local Communities, Create Jobs,
and Boost Rural Economies via Smart Agriculture‒ Renovate and upgrade stadiums and help local governments
reduce steep operating and maintenance costs‒ Collaborate with local farmers to increase agricultural
output, improve quality, and raise rural incomes‒ Use real estate expertise to help build stronger and healthierlocal communities‒ Increase Japan’s food self-sufficiency©J.LEAGUE© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

29

Ichigo ESG – GovernanceFirst J-REIT No Fixed Fee, Performance Fee-Only Structure Performance-linked fee structure to support shareholder value creation
 Pro-active, dynamic management of Ichigo Hotel assets on behalf ofshareholders

Best Practice Governance
REIT

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 within
AMC
Compliance and Audit are directly under the AMC
President to monitor and review critical compliancematters
Ensure objectivity by including third-party,
independent lawyers and accountants in theInvestment Committee & Risk & Compliance
Committee••••

Ichigo Hotel (3463) and Ichigo Office (8975) are the only J-REITs (out of 63)
that both have 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➡ 30 of 63 J-REITs have AMC Presidents serving as➡ Only 4 Asset Management Companies have any

Executive Director of the REIT

All Ichigo Hotel Directors are Independent

Independent Directors

3 of 5 Ichigo Investment Advisors' Directors
are Independent© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

30

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

31

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

Hokuriku/Tokai

B-1

A-1

A-2

A-3

D-1

Grandpark-Inn
Yokohama

Nest Hotel
Sapporo Ekimae

Nest Hotel
Sapporo Odori

ComfortHotel Kushiro

Comfort Hotel
Hamamatsu

F-1

F-2

F-3

G-1

D-3

D-4

Comfort Hotel
Hotel Wing
International Central International
AirportNagoyaKyushuChugoku/Shikoku

E-3

D-2

Comfort Hotel
Suzuka▶ Sapporo
A-1 A-2

G-3▶ Kushiro
A-3

Variable Rent
Fixed Rent
Smile Hotel
Kyoto Shijo

E-4

Hotel Wing International
Kobe Shin Nagata Ekimae

Chisun Inn
Osaka
HommachiComfort Hotel
Okayama

F-4

Nest Hotel
Matsuyama

F-5

Urbain Hiroshima
Executive

Valie Hotel
TenjinNest Hotel
Kumamoto

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▶ 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(July 2020 rent-basis)© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

32

Portfolio GrowthHotelsIPO(Nov 30, 2015)

Jan 2017
Fiscal Period

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%)

Sale

None

Portfolio 9 Hotels : JPY 20.4B
Size(January 2016 end)

None

None

None

1 HotelJPY 2.7B
Gains on Sale
JPY 0.69B

19 Hotels
JPY 47.6B

20 Hotels
JPY 49.1B

21 Hotels
JPY 50.9B

21 Hotels
JPY 50.7B

IPO

Kyushu
6.8%

Kyoto
39.6%

Steady Portfolio Growthvia Acquisitions

Hokkaido
17.7%
Tokai
7.6%

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

July 2020
Fiscal Period
Jan 2020
None

Acquisitions
2 hotels
JPY 4.7B(Appraisal
NOI Yield
4.9%)

None

2 Hotels
JPY 9.7B
Gains on Sale
JPY 1.94BNone

23 Hotels
JPY 54.4B

21 Hotels
JPY 47.1B

23 Hotels
JPY 51.9B

Geographic Diversification
Increases Earnings Stability

Kobe Osaka
7.3% 8.0%
Nagoya13.1%

Location

July 2017 through Jan 2020
Fiscal Periods

July 31, 2020
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%

33

Hakata Hotels & PROPERA− Hakata Hotels, a consolidated subsidiary of Ichigo, is a hotel operator operating
12 hotels 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(No. of rooms inparentheses)

Tokyo: HOTEL EMIT SHIBUYA (72), MusBee Tokyo Hamamatsucho (29), The OneFive Tokyo Kanda (50)
Kyoto: The OneFive Kyoto Shijo (146)
Osaka: Arietta Hotel Osaka (136)
Okayama: The OneFive Okayama (208)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)

PROPERA AI-based revenue management system developed by Ichigo• 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.

34

Individual Hotel Summary
Lease Terms

Location

A-1 Nest Hotel Sapporo Ekimae

Variable + Fixed Rent

Sapporo5,734.93

2,160

2,129

2,520

5.1

+390

A-2 Nest Hotel Sapporo Odori

Variable + Fixed Rent

Sapporo5,638.78

1,450

1,476

1,770

5.0

+293

Fixed Rent

Kushiro, Hokkaido

3,180.58

300

292

424

5.5

+131

B-1 Grandpark-Inn Yokohama

Fixed Rent

Yokohama

1,183.26

1,490

1,498

1,520

4.6

+21

C-1 Smile Hotel Tokyo Asagaya

Variable + Fixed Rent

Tokyo

2,721.70

3,910

3,956

4,200

4.3

+243

Fixed Rent

Tokyo

853.00

1,360

1,305

1,410

4.6

+104

Hotel Name

A-3 Comfort Hotel Kushiro

C-3 Hotel Livemax Nihombashi-Hakozaki

Acquisition Book Value
Price(JPY M)(JPY M)(A)

Value(JPY M)(B)

Unrealized
Cap Rate Gains (JPY M)(B) - (A)(%)

C-4 HOTEL EMIT SHIBUYA

Variable + Fixed Rent

Tokyo

1,470.52

3,700

3,819

3,950

3.6

+130

D-1 Comfort Hotel Hamamatsu

Fixed Rent

Hamamatsu, Shizuoka

4,173.92

1,550

1,442

1,750

5.2

+307

Variable + Fixed Rent

Nagoya5,255.66

2,670

2,707

2,640

4.7

-67

D-3 Comfort Hotel Central International Airport

Fixed Rent

Tokoname, Aichi

11,599.63

5,308

5,329

5,740

4.1

+410

D-4 Comfort Hotel Suzuka

Fixed Rent

Suzuka, Mie

2,186.65

300

278

380

5.0

+101

E-1 Smile Hotel Kyoto Shijo

Variable + Fixed Rent

Kyoto

4,891.84

4,480

4,535

3,590

4.5

-945

E-3 Chisun Inn Osaka Hommachi

Variable + Fixed Rent

Osaka

3,690.00

1,630

1,724

1,510

4.4

-214

E-4 Hotel Wing International Kobe Shin Nagata Ekimae

Variable + Fixed Rent

Kobe

4,540.90

1,490

1,407

1,810

4.7

+402

E-5 Nest Hotel Osaka Shinsaibashi

Variable + Fixed Rent

Osaka

8,057.26

7,600

7,637

6,150

4.4

-1,487D-2 Hotel Wing International Nagoya

Hotel

Jul 2020 Appraisal

Leasable
Area
(m2)

Hotel
No.

F-1 Comfort Hotel Okayama

Fixed Rent

Okayama

5,543.70

1,200

1,171

1,810

5.7

+638

F-2 Nest Hotel Matsuyama

Variable + Fixed Rent

Matsuyama, Ehime

6,671.94

1,610

1,630

1,960

5.6

+329

Fixed Rent

Hiroshima

2,756.20

1,800

1,819

2,060

5.3

+240

F-4 Court Hotel Kurashiki

Variable + Fixed Rent

Kurashiki, Okayama

3,964.19

1,725

1,790

1,990

5.1

+199

F-5 Valie Hotel Hiroshima

Variable + Fixed Rent

Hiroshima

4,332.50

1,500

1,596

1,650

5.0

+53

Fixed Rent

Shimonoseki, Yamaguchi

5,709.35

1,080

1,114

1,180

4.9

+65

F-3 Urbain Hiroshima Executive

F-6 Washington Hotel Plaza Shimonoseki Eki Nishi
G-1 Valie Hotel Tenjin

Variable + Fixed Rent

Fukuoka

1,910.94

1,380

1,437

2,190

4.3

+752

G-3 Nest Hotel Kumamoto

Variable + Fixed Rent

Kumamoto

6,404.36

2,220

2,190

2,320

5.4

+129

23 Hotels

102,471.81

51,91352,29454,5245.0+2,229© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

35

Individual Hotel Operating Results(year-on-year)
Hotel No.

Hotel Name

Lease Terms

Location

No. of
Guest
Rooms

July 2020 (February 2020 - July 2020)
RevPAR (JPY)

Occupancy (%)

ADR (JPY)

Revenue (JPY M)

A-1

004 Nest Hotel Sapporo Ekimae

Variable + Fixed Rent

Sapporo

162

3,041

(-72.7%)58.8(-40.2%)5,172(-54.3%)105.4(-73.3%)A-2

008 Nest Hotel Sapporo Odori

Variable + Fixed Rent

Sapporo

121

3,573

(-71.7%)

63.3(-34.5%)5,646(-56.8%)88.5(-70.5%)

A-3

018 Comfort Hotel Kushiro

Fixed Rent

Kushiro, Hokkaido

126

2,202

(-47.8%)48.2(-36.2%)4,570(-18.3%)54.4(-46.3%)C-1

012 Smile Hotel Tokyo Asagaya

Variable + Fixed Rent

Tokyo

112

4,311

(-52.7%)76.8(-22.0%)5,612(-39.4%)90.9(-52.0%)C-4025 HOTEL EMIT SHIBUYA

Variable + Fixed Rent

Tokyo

72

3,576

–

95.6

–

3,739

–

41.6

–

D-1

006 Comfort Hotel Hamamatsu

Fixed Rent

Hamamatsu, Shizuoka

196

1,954

(-61.1%)39.1(-52.5%)

4,994(-17.9%)69.7(-60.8%)D-2003 Hotel Wing International Nagoya

Variable + Fixed Rent

Nagoya224

1,843(-66.4%)

31.7(-63.6%)

5,812(-7.9%)

62.5(-74.5%)D-3

011 Comfort Hotel Central International Airport

Fixed Rent

Tokoname, Aichi

346

2,095

(-75.0%)25.3(-72.3%)8,266(-9.5%)

137.5(-74.8%)D-4

019 Comfort Hotel Suzuka

Fixed Rent

Suzuka, Mie

105

1,771

(-60.6%)38.3(-49.4%)4,623(-22.2%)

34.3(-60.3%)E-1

001 Smile Hotel Kyoto Shijo

Variable + Fixed Rent

Kyoto

144

2,629

(-66.4%)59.4(-40.3%)4,429(-43.8%)41.9(-81.2%)E-3005 Chisun Inn Osaka Hommachi

Variable + Fixed Rent

Osaka

130

1,439

(-74.7%)26.5(-67.3%)5,429(-22.8%)14.2(-89.4%)E-4

007 Hotel Wing International Kobe Shin Nagata Ekimae

Variable + Fixed Rent

Kobe

133

2,175

–

34.2

–

6,359

–

58.5

–

E-5

010 Nest Hotel Osaka Shinsaibashi

Variable + Fixed Rent

Osaka

302

1,277

(-82.8%)20.7(-77.1%)6,165(-24.9%)42.8(-90.2%)

F-1

017 Comfort Hotel Okayama

Fixed Rent

Okayama

208

2,426

(-54.6%)54.6(-38.2%)4,445(-26.5%)97.9(-53.5%)F-2

015 Nest Hotel Matsuyama

Variable + Fixed Rent

Matsuyama, Ehime

190

2,547

(-56.3%)51.7(-40.8%)4,924(-26.2%)

109.6(-61.9%)F-3

021 Urbain Hiroshima Executive

Fixed Rent

Hiroshima

171

1,818

(-72.3%)34.1(-62.9%)5,327(-25.3%)50.0(-75.3%)F-4

022 Court Hotel Kurashiki

Variable + Fixed Rent

Kurashiki, Okayama

107

2,777

(-66.8%)51.5(-46.5%)5,391(-37.9%)33.3(-82.1%)F-5

024 Valie Hotel Hiroshima

Variable + Fixed Rent

Hiroshima

171

2,211

–

54.2

–

4,080

–

38.7

–

G-1

009 Valie Hotel Tenjin

Variable + Fixed Rent

Fukuoka

77

4,134(-58.3%)69.3(-28.8%)5,962(-41.4%)35.6(-75.8%)G-3023 Nest Hotel Kumamoto

Variable + Fixed Rent

Kumamoto

201

1,899

(-60.3%)43.9(-43.3%)4,331(-30.0%)82.5(-58.6%)

–

–

461

Other

–

–

–

–

Variable Rent Hotels

2,146

2,556

(-66.3%)49.0(-45.9%)5,220(-37.7%)707.2(-74.2%)

Fixed Rent Hotels

1,613

2,090

(-66.1%)

39.2(-54.6%)5,331(-25.5%)465.3(-66.2%)

Total

3,759

2,335

(-66.7%)44.3(-50.1%)

5,267(-33.3%)

1,172.5(-71.5%)* Operating Results data for Hotel Livemax Nihombashi-Hakozaki, Grandpark-Inn 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. YOY changes for Hotel Wing International Kobe Shin Nagata Ekimae and Valie Hotel Hiroshima are unavailable because the operators did not provide
consent to disclose pre-acquisition data.
© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

36

Individual Hotel Financials(JPY thousand)A-1
Tota lA-2

A-3

Nest Hotel Nest Hotel
SapporoSapporoEkimaeOdori

C-1

ComfortHotel
KushiroC-4

D-1

Smile Hotel HOTEL
Tokyo
EMIT
Asagaya
SHIBUYA

D-3

Comfort
ComfortHotel Central
HotelInternational
Hamamatsu
Airport

D-4

E-1

E-3

ComfortHotel
SuzukaSmile Hotel
Kyoto Shijo

E-5

F-1

Chisun Inn Nest Hotel
Osaka
Osaka
Hommachi Shinsaibashi

F-2

F-4

F-5

ComfortNest Hotel Court Hotel Valie Hotel
Hotel
Matsuyama Kurashiki Hiroshima
Okayama

G-1

G-3

Valie
Hotel
TenjinNest Hotel
Kumamoto

Other(A) Rental Income

953,076

22,50622,021

18,41941,00722,00355,361

151,441

15,44230,74439,60056,45645,90028,90632,207

19,382

23,544

19,879308,250

Fixed Rent

935,606

31,12927,072

18,41933,701

22,00355,361

151,441

15,44230,74439,60066,29145,90036,323

31,665

17,77921,66425,134

265,929

Variable Rent

-25,467-8,622-5,051

–

7,305

–

–

–

–

–

–

-9,834–-7,417

541

986

1,880

-5,255–

Other Rent

42,937

–

–

–

–

–

–

–

–

–

–

–

–

–

–

617

–

–

42,320(B) Rental Expenses

165,985

8,346

11,884

5,840

8,312

877

4,073

15,865

3,377

6,571

4,954

16,742

6,044

7,092

5,388

8,260

7,940

7,353

37,060Outsourcing
Fees

17,227

600

600

900

2,574

517

600

570

540

600

915

1,200

600

720

600

720

600

793

3,577

Insurance

2,890

162

173

83

91

53

100

284

48

143

102

248

142

203

111

138

61

185

553

RepairExpenses

21,057

1,879

2,290

427

1,466

–

668

1,840

600

420

248

390

1,025

1,161

–

2,737

3,540

1,182

1,179

Taxes

108,914

5,280

8,387

4,020

3,773

–

2,433

12,717

1,779

5,047

3,324

14,495

3,854

4,578

4,312

4,261

3,373

4,671

22,603

Other
Expenses

15,895

423

432

409

407

305

271

452

408

360

364

408

421

429

364

402

364

521

9,145

NOI
(A) - (B)

787,091

14,15910,137

12,57832,694

21,126

51,288135,576

12,06524,17334,64539,71439,855

21,813

26,81911,121

15,603

12,525271,190(D) Depreciation

336,423

16,097

16,368

5,393

27,122

7,426

14,717

34,794

4,149

16,2807,185

34,532

13,286

18,35011,073

19,722

9,237

18,971

61,713

Net Rental
Income(C) - (D)450,667-1,937-6,231

7,185

5,571

13,70036,571

100,782

7,915

7,892

27,4605,182

26,5693,463

15,745-8,601

6,366-6,446

209,477(C)* Rents for Hotel Wing International Nagoya, Hotel Wing International Kobe Shin Nagata Ekimae, Hotel Livemax Nihombashi-Hakozaki, Grandpark-Inn Yokohama, Urbain
Hiroshima Executive, and Washington Hotel Plaza Shimonoseki Eki Nishi as well as retail rents of Chisun Inn Osaka Honmachi, Smile Hotel Tokyo Asagaya and Nest Hotel
Kumamoto are included 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.

37

Fixed/Variable Rent, RevPAR, ADR, & Occupancy Trends
Fixed/Variable Rent
(JPY thousand)Jul 2019
Rent

Ratio

Jul 2020
Rent

Ratio

1,029,238

57.5%

1,032,448

63.9%

963,173–

Fixed Rent from Operators

984,14555.0%

993,47961.5%

935,606–

Other (Rent from Retail Tenants)

45,092

2.5%

38,9692.4%

27,566–

Variable Rent

735,49341.1%

564,43434.9%-25,467–

Other (Utility Income)

24,937

1.4%

19,104

1.2%

15,371–

1,789,669

100%

1,615,986

100%

937,705

Rent

Fixed Rent

Jan 2020
Rent
Ratio

Total

100%

Operating Results (Aug 2019 – Jul 2020)

RevPAR (right)

ADR (right)

Occupancy (left)

(JPY)

100%

10,000

80%

8,000

60%

6,000

40%

4,000

20%

2,000

0%

0
Aug 2019

Sept 2019Oct 2019

Nov 2019

Dec 2019

Jan 2020

Feb 2020

Mar 2020© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Apr 2020

May 2020

Jun 2020

Jul 2020

38

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 (Aug 2019 – Jul 2020)

RevPAR(right)Occupancy(left)(JPY)

100%

15,00080%

12,000

60%

9,000

40%

6,000
3,000

Guest Rooms

162

20%

AcquisitionPrice

JPY 2.16B

0%0
Aug 2019

Nov 2019

Feb 2020

May 2020

A-2 Nest Hotel Sapporo Odori
Location

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

Nest Hotel Japan
Corporation

ADR(right)Operating Results (Aug 2019 – Jul 2020)

RevPAR(right)Occupancy(left)(JPY)

100%

15,00080%

12,000

60%

9,000

40%

6,000
3,000

Guest Rooms

121

20%

AcquisitionPrice

JPY 1.45B

0%0
Aug 2019© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Nov 2019

Feb 2020

May 2020

39

Variable Rent Hotel Details
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

100%

Occupancy(left)(JPY)
10,000

80%

8,000

60%

6,000

40%

4,000
2,000

ADR
(right)Operating Results (Aug 2019 – Jul 2020)

Guest Rooms

112

20%

AcquisitionPrice

JPY 3.91B

0%

RevPAR(right)0
Aug 2019

Nov 2019

Feb 2020

May 2020

C-4 HOTEL EMIT SHIBUYA (Acquired on February 25,2020)
Location

Shibuya-ku, Tokyo

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

Operator
Guest Rooms
Acquisition
Price

Hakata Hotels Inc.
Shidax Daishinto
Human Services Inc.
72

ADR
(right)Operating Results (Aug 2019 – Jul 2020)

RevPAR(right)100%

10,000

80%

8,000

60%

6,000

40%

4,000

20%

2,000
0

0%

JPY 3.7B

Occupancy(left)(JPY)

Aug 2019© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Nov 2019

Feb 2020

May 2020

40

Variable Rent Hotel Details
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.

Guest Rooms

224

AcquisitionPrice

JPY 2.67B

ADR(right)Operating Results (Aug 2019 – Jul 2020)

RevPAR(right)Occupancy(left)(JPY)

100%

10,000

80%

8,000

60%

6,000

40%

4,000

20%

2,000

0%

0
Aug 2019

Nov 2019

Feb 2020

May 2020

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
Guest Rooms
Acquisition
Price

K.K. Hospitality
Operations
144
JPY 4.48B

ADR(right)Operating Results (Aug 2019 – Jul 2020)

RevPAR(right)Occupancy(left)(JPY)

100%

15,00080%

12,000

60%

9,000

40%

6,000

20%

3,000

0%

0
Aug 2019© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Nov 2019

Feb 2020

May 2020

41

Variable Rent Hotel Details
E-3 Chisun Inn Osaka Hommachi
Location

Osaka

Access5-minute walk from
Sakaisuji-Hommachi
Station on Osaka
Municipal Subway
Chuo LineADR(right)Operating Results (Aug 2019 – Jul 2020)

RevPAR(right)Occupancy(left)(JPY)

100%

10,000

80%

8,000

60%

6,000

SHR Hotel Lease Co.,
Ltd.

40%

4,000

Guest Rooms

130

20%

2,000

AcquisitionPrice

JPY 1.63B

0%Operator0
Aug 2019

Nov 2019

Feb 2020

May 2020

E-4 Hotel Wing International Kobe Shin Nagata Ekimae
Location

Kobe

Access2-minute walk from
Shin Nagata Station
on JR Kobe Line and
JR Sanyo Honsen LineADR
(right)Operating Results (Aug 2019 – Jul 2020)

RevPAR(right)Occupancy(left)(JPY)

100%

10,000

80%

8,000

60%

6,000

Minacia Co., Ltd.

40%

4,000

Guest Rooms

133

20%

2,000

AcquisitionPrice

JPY 1.49B

0%Operator0
Aug 2019

Nov 2019

Feb 2020

May 2020* Hotel name changed from Hotel Suave Kobe Asuta on March 1, 2019. Rebranded and reopened in June 2019.

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

42

Variable Rent Hotel Details
E-5 Nest Hotel Osaka Shinsaibashi
Location

Osaka

Access1-minute walk from
Nagahoribashi Station
on Osaka Municipal
Subway Sakaisuji LineOperator

Nest Hotel Japan
Corporation

Guest Rooms

302

AcquisitionPrice

JPY 7.60B

ADR(right)Operating Results (Aug 2019 – Jul 2020)

RevPAR(right)Occupancy(left)(JPY)

100%

10,000

80%

8,000

60%

6,000

40%

4,000

20%

2,000
0

0%
Aug 2019

Nov 2019

Feb 2020

May 2020

F-2 Nest Hotel Matsuyama
Location

AccessOperator

Matsuyama, Ehime
25-minute drive from
Matsuyama Airport,
3-minute walk from
Katsuyamacho Station
on Iyo Railway JonanLine
Nest Hotel Japan
Corporation

ADR(right)Operating Results (Aug 2019 – Jul 2020)

RevPAR(right)Occupancy(left)(JPY)

100%

10,000

80%

8,000

60%

6,000

40%

4,000
2,000

Guest Rooms

190

20%

AcquisitionPrice

JPY 1.61B

0%0
Aug 2019© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Nov 2019

Feb 2020

May 2020

43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 (Aug 2019 – Jul 2020)

RevPAR(right)Occupancy(left)(JPY)

100%

15,00080%

12,00060%

9,000

The Court Co., Ltd.

40%

6,000

Guest Rooms

107

20%

3,000

AcquisitionPrice

JPY 1.73B

0%Operator0
Aug 2019

Nov 2019

Feb 2020

May 2020

F-5 Valie Hotel Hiroshima
Location

Hiroshima

Access3-minute walk from
Jogakuin-mae Station
on Hiroden Tram LineADR
(right)Operating Results (Aug 2019 – Jul 2020)

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 1.5B

0%Operator0
Aug 2019

Nov 2019

Feb 2020

May 2020* Acquired on July 19, 2019. Rebranded and reopened in September 2019.

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

44

Variable Rent Hotel Details
G-1 Valie Hotel Tenjin

100%

Occupancy(left)(JPY)
12,50080%

10,00060%

7,500

The Court Co., Ltd.

40%

5,000

Guest Rooms

77

20%

2,500

AcquisitionPrice

JPY 1.38B

0%

Location

Fukuoka

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

ADR(right)Operating Results (Aug 2019 – Jul 2020)

RevPAR(right)0
Aug 2019

Nov 2019

Feb 2020

May 2020* Scheduled to change operator and rebrand and reopen as The OneFive Fukuoka Tenjin in October 2020

G-3 Nest Hotel Kumamoto
Location

Kumamoto

Access2-minute walk from
Nishikarashimacho
Station on Kumamoto
City Tram LineOperator

Nest Hotel Japan
Corporation

Guest Rooms
Acquisition
Price

ADR
(right)Operating Results (Aug 2019 – Jul 2020)

RevPAR(right)Occupancy(left)(JPY)

100%

10,000

80%

8,000

60%

6,000

40%

4,000

201

20%

2,000

JPY 2.22B

0%0
Aug 2019© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Nov 2019

Feb 2020

May 2020

45

Fixed Rent Hotel Details
A-3 Comfort Hotel Kushiro
Location

Kushiro, Hokkaido

B-1 Grandpark-Inn Yokohama
Location

Yokohama

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

Access6-minute walk from
Yokohama Station on
JR Line, private
railways, and subway

Operator

Greens Co., Ltd.

Operator

MiddleWood Co., Ltd.

Guest Rooms

126

Guest Rooms

175

AcquisitionPrice

JPY 300M

AcquisitionPrice

JPY 1.49B* Scheduled to change operator and rebrand and reopen in February 2021
(new hotel name TBD)

C-3 Hotel Livemax Nihombashi-Hakozaki
Location

Chuo-ku, Tokyo

D-1 Comfort Hotel Hamamatsu
Location

Hamamatsu, Shizuoka

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

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

Operator

Live Max Inc.

Operator

Greens Co., Ltd.

Guest Rooms

48

Guest Rooms

196

AcquisitionPrice

JPY 1.36B

AcquisitionPrice

JPY 1.55B© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

46

Fixed Rent Hotel Details
D-3 Comfort Hotel Central International Airport

D-4 Comfort Hotel Suzuka

Location

Tokoname, Aichi

LocationSuzuka, Mie

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

Access3-minute walk from
Shirako Station on
Kintetsu Nagoya LineOperator

Greens Co., Ltd.

Operator

Greens Co., Ltd.

Guest
Rooms

346

Guest Rooms

105

JPY 5.31B

AcquisitionPrice

JPY 300M

AcquisitionPrice

F-1 Comfort Hotel Okayama

F-3 Urbain Hiroshima Executive
Location

Hiroshima

Access15-minute walk from
Okayama Station on
Sanyo Shinkansen,
Sanyo Main Line, Uno
Line

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

Greens Co., Ltd.

Operator

Yuki Corporation

Location

Okayama

Guest Rooms

208

Guest Rooms

171

AcquisitionPrice

JPY 1.20B

AcquisitionPrice

JPY 1.80B* Scheduled to change operator and rebrand and reopen as The OneFive Okayamain October 2020

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

47

Fixed Rent Hotel Details
F-6 Washington Hotel Plaza Shimonoseki Eki Nishi
Location

Shimonoseki, Yamaguchi

Access3-minute walk from
Shimonoseki Station on
JR Sanyo Main LineOperator

Washington Hotel Corp.

Guest
Rooms

238

AcquisitionPrice

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

48

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

49

Stable Financial Base
− Shorter-term loans are floating rate to take advantage of current low
interest rates− 90% of loans are fixed to hedge against a rise in interest rates
Outstanding Loan Balance
Jul 31, 2018
AmountJan 31, 2019

Jul 31, 2019

Jan 31, 2020

Jul 31, 2020

JPY 21.75B

JPY 21.75B

JPY 25.47B

JPY 25.47B

JPY 25.47B

Long-Term Loan Ratio

100%

100%

100%

100%

93.1%

Fixed Rate Ratio

73.8%

80.7%

83.5%

83.5%

91.4%

Average Interest Rate

0.88%

0.91%

0.86%

0.88%

0.87%

Average Remaining
Maturity

3.1 years

3.2 years

3.0 years

2.5 years

2.5 years

LTV (Total Assets Basis)

39.1%

38.8%

43.0%

41.5%

43.6%

Distribution of Loan Maturities(JPY M)
8,000
6,000
4,000

Fixed Rate
Floating Rate

1,750
5,250
4,500

4,500
3,000

2,000

450

2,220

1,800

2,000

0
Jan 2021

Jul 2021

Jan 2022

Jul 2022

Jan 2023

Jul 2023

Jan 2024© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Jul 2024

Jan 2025

Jul 2025

Jan 2026

Jul 2026

50

Loan Details
Loan Balances(as of July 31, 2020)

Loan

Amount(JPY million)

LenderFloating/
Fixed

Interest Rate(%)

Borrowing Date

Maturity

Term Loan 2

SMBC, Mizuho, Shinsei, Resona

5,250

Fixed

1.08000%

November 30, 2015

November 30, 2020

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

0.51909%

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 14

SMBC, Mizuho, Shinsei, Resona

1,750

Variable

0.46909%

May 29, 2020

November 30, 2020

Total

25,470

Nishi-Nippon City
4%

Average Remaining Loan Term 2.5 years

Fixed vs. Floating

Lender Composition
Fukuoka3%

Average 0.87%

Aozora1%

Strong Lender Group
Floating
8.6%

Resona10%

LTV Control
Interest Rate Risk Management

SMBC
39%

Shinsei
12%

Mizuho
31%

Fixed
91.4%

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

Stable Financial Position

51

Shareholder Composition
Major Shareholders (as of July 31, 2020)

By Number of Shares Held
No. ofShares

Name

Share

1

Custody Bank of Japan, Ltd.,
Trust Account

22,5318.8%

2

The Master Trust Bank of Japan,
Trust Account

18,713

7.3%

3

Ichigo Trust Pte. Ltd.

10,9084.3%

4

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

7,617

3.0%

5

Ichigo Inc. (Sponsor)

6,500

2.5%

6

Banshu Shinkin Bank

4,900

1.9%

7

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

4,165

1.6%

8

BNY FOR GCM CLIENT ACCOUNTS (E)
ISG

3,367

1.3%

9

Individual Shareholder

3,091

1.2%

10

DFA INTERNATIONAL REAL ESTATESECURITIES PORTFOLIO

2,799

1.1%

Total

84,591

33.2%

Foreign Corporations & Individuals
Non-Financial Domestic Corporations
40,149(15.7%)
16,748(6.6%)

Domestic Financial Institutions
Domestic Individuals(Shares)

25,161(9.9%)
16,953(6.6%)

34,316(13.5%)

91,029(35.7%)

65,558(25.7%)

16,244(6.4%)

106,633(41.8%)

91,444(35.9%)

Jul 2019(254,974 shares)

121,831(47.8%)Jan 2020(254,974 shares)

138,856(54.5%)

Jul 2020(254,974 shares)(Outstanding Shares)

By Number of Shareholders

Domestic Individuals
Domestic Financial Institutions
City banks, trust banks
Regional banks
Other (including securities companies)
Non-Financial Domestic Corporations
Foreign Corporations & Individuals
Total© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Jul 31, 2019
Shareholders
13,415
54
7
2
45
220
88
13,777

Jul 31, 2020
Jan 31, 2020
Shareholders Shareholders Share
17,201
18,688
97.9%
56
38
0.2%
6
4
0.0%
3
0
0.0%
47
34
0.2%
248
248
1.3%
99
124
0.6%
17,60419,098100%

52

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

53

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-19, generating continuing
impacts 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
watched to verify their rent-paying ability.
• No new growth driver is currently expected.

Current Environment• Sales and acquisitions limited due to 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.

54

Growth Strategy Roadmap
Flexibly Responding to Market Environment
Stage I

Stage II

• Drive higher earnings via economies of scale from increased
asset size
• Invest primarily in lodging-focused hotels• Acquisition of conversion-feasible assets and lodging
facilities such as serviced apartments• Asset acquisitions via SPCs
• Asset acquisitions using low cost borrowing capacity (LTV)

Enhance operational efficiency by monitoring operations and providing advice to partner hotel operators
Increase rents and earnings through value-add capex• Minimize expenses via collaboration with operators• Increase earnings via more favorable lease contracts,
rebranding, etc.

• Examine opportunities for large-scale renovations andrebranding to increase earnings• Further increase earnings via more favorable lease contracts,
rebranding, etc.

Financing••• Construct a diversified portfolio to pursue both income
stability and earnings growth• Maximize dividend and earnings via unrealized gains via asset
acquisitions and sales• Acquire prime-location full-service hotels and resort hotels in
addition to lodging-focused hotels• Increase portfolio size and generate scale efficiencies via
acquisitions of newly built hotels in addition to value-add ofexisting hotels• Maintain a strong lender base
• Appropriate LTV• Manage interest rate risk
• Prepare to acquire credit rating• Shift to no fixed fee, performance fee-only structure• Acquire credit rating• Diversify financing• Continue to control LTV and manage interest rate risk
• Prepare to enter global REIT indices

Other

Organic
GrowthExternal
GrowthContinuous Dividend Growth via External Growth, Organic Growth, and Strong Financial Base

• Conduct share buybacks to increase dividend and maintainappropriate share price• Conduct share buybacks to increase dividend and maintainappropriate share price• Promote responsiveness to disasters (Respond to ESG
requirements)© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

55

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

Manages Ichigo Office (8975), Ichigo Hotel (3463), 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

Ichigo(TSE First Section 2337)

Ichigo Hotel (3463)

Ichigo Preserves andImproves Real Estate

Hiromi Miyake(Weightlifting)

The word “Ichigo” comes from theancient Japanese proverb, Ichigo
Ichie, literally meaning “Onelifetime, one encounter.” Thephrase 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, because that particular
moment will only exist once andmust be fully lived and realized.

Ichigo embraces the Ichigo Ichie philosophy of sincerity
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 Green (9282)
Ichigo Office (8975)

Sustainable
Real Estate

Clean Energy

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

56

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)







Grow earnings via collaboration with hotel
operators
Grow earnings via rebranding and improving
contract terms
Grow earnings via smart cost control

Sell

Value-Add(Increase Asset Value)

Role

Value-add capex
On-going renovation and equipment renewal
Increase hotel attractiveness & competitiveness



Hard





Soft

Buy




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

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

Sell

57

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.

58

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/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 andinvesting in low-carbon technologies such as solar energy.

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

59