Creating peace of mind through honest and committed management.

March 16, 2016

Financial Report for the January 2016 Fiscal Period
Ichigo Hotel REIT Investment Corporation (Tokyo Stock Exchange, 3463)
Representative: Osamu Miyashita, Executive Director
www.ichigo-hotel.co.jp/english
Ichigo Real Estate Investment Advisors Co., Ltd. (Ichigo Hotel REIT Asset Management Company)
Representative: Wataru Orii, President & Representative Statutory Executive Officer
Inquiries: Masanori Kubota, Statutory Executive Officer (Finance, Accounting)Telephone: +81-3-3502-4892
Submission of Financial Report (Yuka Shoken Hokokusho): April 27, 2016 (expected)
Dividend Payment: April 22, 2016 (expected)
Supplemental Material to Financial and Business Results: Yes (Corporate Presentation)
Financial and Business Results Briefing: Yes (for institutional investors and analysts)
1. Financial Results for the January 2016 Fiscal Period (July 22, 2015 - January 31, 2016)(1) Earnings(million yen; period-on-period change)

January 2016

January 2016

Operating
Revenue197

Change―Operating
Profit102

Change―Net Income per Share(yen)

Ratio of Net Income
to Equity

1,352

0.5%

Recurring
Profit66

Change―Ratio of
Recurring Profit
to Total Assets
0.3%

Net
Income65

Change―Ratio of
Recurring Profit
to Operating Revenue
33.4%(Note 1) Ichigo Hotel REIT’s fiscal period ran from the day the REIT was founded on July 22, 2015 toJanuary 31, 2016 (194 days). The REIT’s actual operating timeframe during the first period was
November 30, 2015 to January 31, 2016 (63 days).
(Note 2) Net Income per Share is based on the average number of outstanding shares (48,260 shares). Net
Income per Share during the actual operating timeframe was 479 yen, which is based on the
average number of outstanding shares during that timeframe (136,230 shares).
(Note 3) Ratio of Net Income to Equity and Ratio of Recurring Profit to Total Assets are calculated using
November 30, 2015 as the beginning of the period for weighted-average Equity and Total Assets.
(Note 4) The “Change” in Operating Revenue, Operating Profit, Recurring Profit, and Net Income aboverefers to period-on-period change. However, since this fiscal period is the REIT’s first, theperiod-on-period change is not applicable.
(2) Dividends

January 2016

Dividend per
Share

Total
Dividends

Dividend per
Share in Excessof Earnings

Total Dividends
in Excess of
Earnings

Payout
Ratio

(yen)
471

(million yen)
65

(yen)
0

(million yen)
0

(%)
99.9

(Note) The January 2016 payout ratios reflect new share issuances and are calculated as follows:
Payout Ratio = Total Dividends / Net Income x 100

Ratio of
Dividends
to NetAssets(%)
0.5

(3) Assets and Equity

January 2016

Total Assets(million yen)
23,071Net Assets(million yen)
14,211Equity Ratio
(%)
61.6

Cash Flow fromOperating Activities

Cash Flow from
Investment Activities

Cash Flow from
Financing Activities(million yen)(571)

(million yen)
(20,476)(million yen)
22,575Net Assets per Share(yen)
102,608(4) Cash Flow

January 2016

Cash and Cash
Equivalents at End of
the Period(million yen)
1,526

2. Earnings Forecasts for the July 2016 Fiscal Period (February 1, 2016 to July 31, 2016) and the January
2017 Fiscal Period (August 1, 2016 to January 31, 2017)(million yen; period-on-period change)

July 2016

Operating
Revenue
730

January 2017755

268.9%

Operating
Income
423

3.5%

444

Change311.9%

Recurring
Profit
341

5.0%

361

Change415.1%Net
Income340

421.0%

6.1%

360

6.1%

ChangeChange(yen)
Dividend per ShareDividend per Share in Excess of Earnings

July 2016

2,455

0

January 2017

2,606

0

(Note) The forecast Net Income per Share for July 2016 is 2,455yen and for January 2017 is 2,606yen.

2

3. Other(1) Changes in Accounting Policies, Changes in Accounting Estimates, and Retrospective
Restatements(i) Changes Accompanying Amendments to Accounting Standards:(ii) Changes Not Listed in (i):(iii) Changes in Accounting Estimates:(iv) Retrospective Restatements:

None
None
None
None

(2) Number of Shares Issued and Outstanding(i) The number of shares issued and outstanding (including treasury shares) was 138,500 shares
as of January 31, 2016.
(ii) There were no treasury shares as of January 31, 2016.
Completion Status of Auditing ProceduresThis document is not subject to the auditing requirements set forth in the Financial Instruments and Exchange
Law of Japan. The auditing procedures in accordance with those requirements have thus not been completed asof the date of the publication of this document.
Appropriate Use of Performance Forecasts and Other Matters of Special Note
The forecasts presented above are current figures based on certain preconditions. Accordingly, the actual
operating revenue, operating income, recurring profit, net income, dividend per share, and dividend per share inexcess of earnings may vary due to changes in circumstances. Moreover, these forecasts should not be construed
as a guarantee of such performance or results.
For details on preconditions, please refer to the “Preconditions for July 2016 Fiscal Period Earnings
Forecast” on page 4 and “Preconditions for January 2017 Fiscal Period Earnings Forecast” on page 6.
This English version is a translation of the original Japanese notice and is provided solely for informational
purposes. Should there be any discrepancies between this translation and the Japanese original, the latter shallprevail.

3

Preconditions for July 2016 Fiscal Period Earnings Forecast
Item

Preconditions

Period February 1, 2016 – July 31, 2016 (182 days)

Portfolio Assets

 9 assets in total. The forecast assumes there will be no additional acquisitions or sales before
the end of July 2016.
 However, the number of assets may change due to acquisitions or sales.
Rental revenue is calculated based on current lease contracts taking into consideration suchfactors as tenant trends and market conditions.
Assumed Operating Performance
July 2016 Fiscal Period1

Occupancy (%)

91.2

ADR2 (yen)

8,611

1

Occupancy is calculated from the following formula:
Occupancy = Total number of guest rooms occupied during the period / (total number ofguest rooms x number of days hotel was in operation during the period)2
ADR or Average Daily Rate is calculated from the following formula:
ADR = Total sales from accommodation (excluding restaurant charges and other service
fees) / number of guest rooms occupied during the period
Details of July 2016 Rental Revenue(million yen)Fixed Rent /Minimum
Variable Rent
Guaranteed
Rent
30
128
—
75
58
31
22
36
—
55
23
50
21
31

Operating Revenue
Asset Name
Smile Hotel Kyoto Shijo
Hotel Vista Premio Kyoto
Nest Hotel Sapporo Ekimae
Chisun Inn Osaka Hommachi
Comfort Hotel Hamamatsu
Nest Hotel Sapporo Odori
Valie Hotel Tenjin

Total
158
75
89
58
55
74
53

Other (Hotel Wing International Nagoya
114
17
131
and Hotel Suave Kobe Asuta)
Total
387
308
695
(Note) The data for Hotel Wing International Nagoya and Hotel Suave Kobe Asuta are totaled
under “Other,” because the hotel operators did not give consent to disclose
hotel-specific data.
Other rental revenue: 34 million yen (total rent from retail tenants at Hotel Vista Premio Kyoto
and Chisun Inn Osaka Hommachi)

4Operating
Expenses Rental expenses, Ichigo Hotel REIT’s principal operating expense, are calculated based on
historical data adjusted for anticipated expense variations. (Depreciation expenses are treatedseparately.) Depreciation has been calculated using the straight-line method. Depreciation of 101 million
yen is anticipated for the July 2016 fiscal period.
 Property taxes and city planning taxes are anticipated to total 48 million yen for the July
2016 fiscal period.
 Building maintenance and repair expenses are based on what Ichigo Real Estate Investment
Advisors Co., Ltd., the asset management company of Ichigo Hotel REIT, estimates will benecessary for each asset during the period. However, actual expenses for the period could
differ significantly from these forecast amounts for reasons including the variability ofmaintenance and repair expenses, one-time costs due to unexpected building damage, etc.

Non-Operating
Expenses Interest expenses and borrowing-related expenses of 65 million yen are anticipated for the
July 2016 fiscal period.
 Depreciation of expenses related to the establishment of the REIT and share issuance isanticipated to total 16 million yen.

Borrowings

 Ichigo Hotel REIT’s balance of loans payable stands at 8,500 million yen as of March 16,
2016.

Number of Shares 138,500 shares issued and outstanding, with no additional new issuance before the end of
July 2016.

Dividend per Share The dividend forecasts assume that distributions will comply with the dividend distribution
policy stipulated in Ichigo Hotel REIT’s Articles of Incorporation.
 The dividend per share is subject to change due to factors such as sales of portfolio assets,changes in rental revenue associated with tenant turnover, the occurrence of unexpectedmaintenance and repair costs, and fluctuations in interest rates.

Dividend in Excessof Earnings per
Share Ichigo Hotel REIT does not plan on making any dividend distribution in excess of earnings
per share or retained earnings.

Other Performance forecasts are based on the assumption that no material revisions will be madeto laws and ordinances, the tax system, accounting standards, listing rules of the Tokyo
Stock Exchange, and rules of the Investment Trusts Association, Japan, etc.
 Performance forecasts are also based on the assumption that there will be no unexpectedmaterial change in general economic trends and real estate market conditions, etc.

5Preconditions for January 2017 Fiscal Period Earnings Forecast
Item

Preconditions

Period August 1, 2016 – January 31, 2017 (184 days)

Portfolio Assets

 9 assets in total. The forecast assumes there will be no additional acquisitions or sales
before the end of January 2017.
 However, the number of assets may change due to acquisitions or sales.
Rental revenue is calculated based on current lease contracts taking into considerationsuch factors as tenant trends and market conditions.
Assumed Operating Performance
January 2017 Fiscal Period
Occupancy1 (%)

90.5

ADR2 (yen)

8,841

1

Occupancy is calculated using the following formula:
Occupancy = Total number of guest rooms occupied during the period / (total number ofguest rooms x number of days hotel was in operation during the period)2
ADR or Average Daily Rate is calculated using the following formula:
ADR = Total sales from accommodation (excluding restaurant charges and other service
fees) / number of guest rooms occupied during the period
Details of January 2017 Rental Revenue(million yen)
Operating Revenue

Asset Name
Smile Hotel Kyoto Shijo
Hotel Vista Premio Kyoto
Nest Hotel Sapporo Ekimae
Chisun Inn Osaka Hommachi
Comfort Hotel Hamamatsu
Nest Hotel Sapporo Odori
Valie Hotel Tenjin

Fixed Rent/
Minimum
Guaranteed
Rent

Variable Rent

34

151

186

75

14

89

32

53

86

36

—
—

36

55
23

49

72

24

36

61

Total

55

Other (Hotel Wing International Nagoya
114
19
133
and Hotel Suave Kobe Asuta)
Total
395
325
721
(Note) The data for Hotel Wing International Nagoya and Hotel Suave Kobe Asuta aretotaled under “Other,” because the hotel operators did not give consent to disclose
hotel-specific data.
Other rental revenue: 34 million yen (total rent from retail tenants at Hotel Vista Premio
Kyoto and Chisun Inn Osaka Hommachi)

6Operating Expenses

Non-Operating
Expenses
Borrowings

 Rental expenses, Ichigo Hotel REIT’s principal operating expense, are calculated basedon historical data adjusted for anticipated expense variations. (Depreciation expenses
are treated separately.) Depreciation has been calculated using the straight-line method. Depreciation of 104
million yen is anticipated for the January 2017 fiscal period.
 Property taxes and city planning taxes are anticipated to total 48 million yen for theJanuary 2017 fiscal period.
 Building maintenance and repair expenses are based on what Ichigo Real Estate
Investment Advisors Co., Ltd., the asset management company of Ichigo Hotel REIT,
estimates will be necessary for each asset during the period. However, actual expenses
for the period could differ significantly from these forecast amounts for reasons
including the variability of maintenance and repair expenses, one-time costs due to
unexpected building damage, etc.
 Interest expenses and borrowing-related expenses of 65 million yen are anticipated for
the January 2017 fiscal period.
 Depreciation of expenses related to the establishment of the REIT and share issuance isanticipated to total 16 million yen.
 Ichigo Hotel REIT’s balance of loans payable stands at 8,500 million yen as of March
16, 2016.

Number of Shares 138,500 shares issued and outstanding, with no additional new issuance before the endof January 2017.

Dividend per Share The dividend forecasts assume that distributions will comply with the dividend
distribution policy stipulated in Ichigo Hotel REIT’s Articles of Incorporation.
 The dividend per share is subject to change due to factors such as sales of portfolio
assets, changes in rental revenue associated with tenant turnover, the occurrence of
unexpected maintenance and repair costs, and fluctuations in interest rates.

Dividend in Excess of
Earnings per Share Ichigo Hotel REIT does not plan on making any dividend distribution in excess ofearnings per share or retained earnings.

Other Performance forecasts are based on the assumption that no material revisions will bemade to laws and ordinances, the tax system, accounting standards, listing rules of theTokyo Stock Exchange, and rules of the Investment Trusts Association, Japan, etc.
 Performance forecasts are also based on the assumption that there will be no unexpectedmaterial change in general economic trends and real estate market conditions, etc.

7

Financial Statements(1) Balance Sheet(Thousand yen)
January 2016(as of January 31, 2016)
AssetsCurrent assets
Cash and cash equivalents
Cash and cash equivalents in trust
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Other
Total current assets
Fixed assets
Property, plant, and equipment
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Fixtures in trust
Accumulated depreciation
Fixtures in trust, net
Land in trust
Total property, plant, and equipment
Investments and other assets
Tenant leasehold and security deposits
Long-term prepaid expenses
Investments and other assets, net
Total fixed assets
Deferred assets
Expenses related to the establishment of
REIT
Share issuance expenses
Total deferred assets
Total assets

992,622533,849
42,43257,801
521,086
11,922
2,159,714

6,170,044(49,963)
6,120,081
2,220
(23)
2,196
5,275
(88)
5,187
14,515,032
20,642,497
10,000147,228
157,228
20,799,725
45,79965,920111,720
23,071,160

8

(Thousand yen)
January 2016(as of January 31, 2016)
Liabilities
Current liabilities
Operating accounts payable
Accounts payable – otherAccrued expenses
Income taxes payable, etc.
Advances received
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable
Tenant leasehold and security deposits in
trust
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders’ equity
Shareholders’ capital
Surplus
Unappropriated retained earnings /loss
Total surplus
Total shareholders’ equity
Total net assets
Total liabilities and net assets

40,55524,752
14,111
937
28,256
225
108,8398,500,000
251,1118,751,111
8,859,951
14,145,932
65,27665,276
14,211,208
14,211,208
23,071,160

9

(2) Income Statement(Thousand yen)
January 2016
(July 22, 2015 toJanuary 31, 2016)
Operating revenue
Rental revenue
Other rental revenue
Total operating revenue
Operating expenses
Rental expense
Asset management fee
Asset custody fee
Administrative service fees
Director’s compensation
Other operating expenses
Total operating expenses
Operating profit
Non-operating income
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expenses
Borrowing related expenses
Depreciation of expenses related to theestablishment of REIT
Depreciation of share issuance expenses
Total non-operating expenses
Recurring profit
Income (losses) before income taxes
Income taxes – current
Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings/loss

192,936
5,013
197,950
67,66916,915
1,119
2,853
4,425
2,225
95,210102,7400014,111
12,626
5,085
4,702
36,525
66,214
66,214937
937
65,276―65,27610

(3)Statement of Shareholders’ Equity
January 2016 (July 22, 2015 to January 31, 2016)(Thousand yen)
Shareholders’ equity
Surplus
Shareholders’capitalBalance at start ofthe period―

Net assets

Unappropriatedretainedearnings/loss

Total surplus

Total
shareholders’equity――――14,145,932

14,145,932

Changes during
the period
Issuance of
new shares

14,145,932

Net income

65,27665,27665,27665,276

Total changes during
the period

14,145,932

65,27665,276

14,211,208

14,211,208

Balance at end of
the period

14,145,932

65,27665,276

14,211,208

14,211,208

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(4) Cash Flow Statement(Thousand yen)
January 2016
(July 22, 2015 toJanuary 31, 2016)
Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Depreciation of expenses related to theestablishment of REIT
Depreciation of share issuance expenses
Interest expenses
Decrease (increase) in operating accounts
Decrease (increase) in consumption taxes
Decrease (increase) in prepaid expenses
Decrease (increase) in long-term advance
Increase (decrease) in operating accounts
Increase (decrease) in accounts payable
Increase (decrease) in advances received
Other, net
Subtotal
Net cash generated by (used in) operating
Cash flows from investment activities
Purchase of property, plant, and equipment inIncrease in tenant leasehold and security
deposits in trust

66,21450,074
5,085
4,702
14,111(42,432)(521,086)(57,801)(147,228)
15,11824,752
28,256(11,696)(571,928)(571,928)(20,667,134)
251,111

Payments of security deposits(10,000)

Expenses related to the establishment of REIT
Net cash generated by (used in) investment
Cash flows from financing activities
Increase in long-term loans payable
Proceeds from issuance of shares
Net cash generated by (used in) financing
Net increase (decrease) in cash and cash
Cash and cash equivalents at beginning of theperiod(50,885)(20,476,908)

Cash and cash equivalents at end of the period

1,526,471

8,500,000
14,075,308
22,575,308
1,526,471―

12