This English translation is provided for information purposes only. If any discrepancy is identified between thistranslation and the Japanese original, the Japanese original shall prevail.
August 22, 2024

Midterm Financial Report for the Fiscal Year Ending December 31, 2024
(January 1, 2024 – June 30, 2024)

Japan Hotel REIT Investment Corporation
Listing:
Securities code:
URL:
Representative:

Tokyo Stock Exchange8985
https://www.jhrth.co.jp/en/
Kaname Masuda, Executive Director

Asset Management Company:
Representative:
Contact:

Japan Hotel REIT Advisors Co., Ltd.
Hiroyuki Aoki, President & CEO
Makoto Hanamura
Director of the Board, Head of Finance and Planning Division
Phone: +81-3-6422-0530

Scheduled date to file midterm Securities Report:

September 20, 2024

Scheduled date to file midterm Securities Report:
Yes
Schedule for presentation of midterm financial results: Yes (Institutional investors and analysts only)(Amounts are rounded down to the nearest millions of yen)

1. Status summary of operation and assets for the midterm of the fiscal year ending December 31, 2024
(January 1, 2024 – June 30, 2024)(1) Operating results
Midterm period ended
June 30, 2024
June 30, 2023
Fiscal year ended
December 31, 2023

Operating revenue
JPY1M%
14,36227.2
11,288107.8
26,57478.2(Percentages: full year—changes from the same period of the previous year)

Operating income
JPY1M
%
8,498
47.5
5,759
15,014249.4

Ordinary income
JPY1M
%
7,434
51.8
4,897
13,135

Net income (loss)
JPY1M
%
7,433
51.8
4,896

391.4

13,134391.6

Net income for the current
midterm period per unit
Midterm period ended
JPY
June 30, 2024
1,603
June 30, 2023
1,096
Fiscal year ended
December 31, 2023

2,909

(Note) Net income for the current midterm period per unit is calculated based on the period-average number of investment units issued.

(2) Financial position
Midterm period ended
June 30, 2024
June 30, 2023
Fiscal year ended
December 31, 2023

Total assets
JPY1M
421,703396,271429,955

Net assets
JPY1M
238,714
224,748

Equity ratio
%
56.6
56.7

Net assets per unit
JPY
51,48050,312244,980

57.0

52,831(Note) Net assets per unit are calculated based on the total number of investment units issued and outstanding at the end of the midterm period/full year.

- 1 -(3) Cash flows

Midterm period ended
June 30, 2024
June 30, 2023

Cash flows fromoperating activities
JPY1M
10,871
9,248

Cash flows frominvesting activities
JPY1M(3,821)(13,009)17,784(38,551)

Fiscal year ended
December 31, 2023

Cash flows from
Cash and cash equivalents
financing activities
at the end of year
JPY1M
JPY1M
(13,971)
21,594(3,044)22,70819,76728,515

2. Operating forecast for the fiscal year ending December 31, 2024
(January 1, 2024 – December 31, 2024)

Full year

Operating revenue

Operating income

Ordinary income

JPY1M
32,910JPY1M
20,198JPY1M
17,645

%
23.8

%
34.5

%
34.3

(Percentages show changes from the previous year)
Dividend per unit
Dividend per unit
Net income(Excess of earnings resulting from excess ofearnings
exclusive)

JPY1M
17,644

%
34.3

JPY
3,815

JPY
－

(Reference) Estimated net income per unit for the fiscal year ending December 31, 2024 (full year): ¥3,626 (Calculated based on the estimate of the period-average
number of investment units of 4,865,133).
(Note) The source of the dividend payment is planned to be the total net income plus the reversed amount for temporary difference adjustment (¥1,802 million).

* Other(1) Changes in accounting policies, changes in accounting estimates, and restatement of financial statements for prior periods after error
corrections(a) Changes in accounting policies due to revisions to accounting standards and other regulations: No change(b) Changes in accounting policies due to other reasons than above (a): No change(c) Changes in accounting estimates: No change(d) Restatement of financial statements for the prior period after error corrections: No change(2) Total number of investment units issued and outstanding(a) Total number of investment units issued and outstanding at the end of the fiscal year/period(including investment units owned by Japan Hotel REIT Investment Corporation (JHR))
As of June 30, 2024 4,637,006 units As of June 30, 2023 4,467,006 units As of December 31, 2023 4,637,006 units(b) Number of JHR’s investment units held at the end of the fiscal year
As of June 30, 2024
(Note)

0 unit As of June 30, 2023

0 unit As of December 31, 2023

0 unit

For the number of investment units serving as the basis of computation for calculating net income per unit, please refer to “Notes on perunit information” on page 37.

* Midterm financial reports are not subject to interim audit procedures by accountants.
* Special items
Forward-looking statements presented in this financial report, including operating forecasts, are based on information currently
available to us and on certain assumptions we deem reasonable. As such, actual operating and other results may differ materiallyfrom these forecasts due to various factors. Furthermore, we do not intend to guarantee any dividend amount by this forecast. For theassumptions of the operating forecast and notes for the use of the operating forecast, please refer to “1.
Operating results; (1) Operating results; (B) Outlook for the second half of the fiscal year” on page 6 and “Assumptions of theoperating forecast for the full fiscal year ending December 2024 (25th period)” on page 15.

- 2 -○ Table of Contents
1. Operating results ............................................................................................................................................................................. 4(1) Operating results ......................................................................................................................................................................... 4
2. Semi-annual financial statements .................................................................................................................................................. 22(1) Semi-annual balance sheets ....................................................................................................................................................... 22(2) Semi-annual statements of income ............................................................................................................................................ 24(3) Semi-annual statements of changes in net assets ....................................................................................................................... 25(4) Semi-annual statements of cash flows ....................................................................................................................................... 27(5) Notes on going concern assumption .......................................................................................................................................... 28(6) Notes on matters concerning significant accounting policies .................................................................................................... 28(7) Notes to semi-annual financial statements ................................................................................................................................ 30(8) Changes in the total number of investment units issued and outstanding .................................................................................. 41
3. Reference information.................................................................................................................................................................... 42(1) Information on values of assets under management, etc. ............................................................................................................ 42(2) Status of capital expenditures ..................................................................................................................................................... 56- 3 -1. Operating results(1) Operating results(A) Overview of the midterm period under review(a) Brief history and principal activities
Japan Hotel REIT Investment Corporation (hereinafter referred to as “JHR”) was established under the Act on Investment
Trusts and Investment Corporations (Act No. 198 of 1951, as amended; hereinafter referred to as the “Investment TrustsAct”) on November 10, 2005, and was listed on the Real Estate Investment Trust (REIT) section of the Tokyo Stock
Exchange (Securities code: 8985) on June 14, 2006.
JHR entrusts asset management to Japan Hotel REIT Advisors Co., Ltd. (hereinafter referred to as the “Asset Management
Company”). Focusing on importance of hotels as social infrastructure and profitability as investment real estate, JHR
primarily invests in real estate, which is wholly or partially used as hotels or real estate equivalents of such real estate or
related assets that are backed by such real estate or real estate equivalents (hereinafter referred to as “Real Estate for Hotels,etc.”).
JHR, the former Nippon Hotel Fund Investment Corporation, merged with Japan Hotel and Resort, Inc. with an effective
date of April 1, 2012 (hereinafter referred to as the “Merger”) and changed its name to Japan Hotel REIT Investment
Corporation. Since the Merger through the end of the midterm period under review (the six-month period from January 1,
2024, to June 30, 2024), JHR has conducted ten public offerings for capital increase and continuously acquired highly
competitive hotels in mainly strategic investment areas where domestic and inbound leisure demand can be expected overthe medium to long term.
By implementing the aforementioned growth strategy, JHR has expanded its asset size while improving the quality of its
portfolio through new property acquisitions of 32 properties amounting to ¥308,537 million (acquisition price basis) in total
since the Merger through the end of the midterm period under review. As a result, JHR had a portfolio of 47 properties witha combined acquisition price of ¥396,918 million, and the total number of investment units issued and outstanding stood at
4,637,006 units at the end of the midterm period under review.
JHR announced its 11th public offering in June 2024 and acquired four new properties (total acquisition price of ¥56,190
million) in July 2024 (after the end of the midterm period under review). As of the date of submission of this report, JHR
owns 51 properties with a total acquisition price of ¥453,108 million and has a total of 5,097,006 investment units issued.
(b) Investment performance for the midterm period under review
Throughout the midterm period under review (the six-month period from January 1, 2024 to June 30, 2024), the Japanese
economy showed a slight recovery trend due to an increase in capital investment and improvement in employment conditions,despite stagnation in personal consumption recovery due to the impact of inflation.
Regarding the domestic accommodation and tourism market, the number of foreign visitors to Japan (hereinafter referred toas “inbound visitors”) has remained above that of the same period in 2019, the pre-pandemic level, since the fall of 2023.
With domestic accommodation demand staying strong, the estimated number of visitors in the first half of 2024 reached17.77million, representing a 65.9% year-on-year increase and a 6.9% increase compared to the same period in 2019,according to the Japan National Tourism Organization (JNTO).
Moreover, based on the preliminary figures from the Overnight Travel Statistics Survey (Japan Tourism Agency), the numberof Japanese overnight guests at domestic accommodations in the first half of 2024 was almost at the same level as the same
period in 2019, with a decrease of 0.5%. In contrast, the number of foreign overnight guests in the first half of 2024 increased
significantly, reaching an increase of 31.4 % compared to the same period in 2019, greatly exceeding the pre-pandemic level.
As a result, the total number of overnight guests in domestic accommodation facilities in the first half of 2024 will be ¥305
million, a year-on-year increase of 7.5% and a 6.8% increase compared to the same period in 2019, and JHR believes thatthe accommodation market is entering a new phase of growth, driven by strong inbound demand.
For internal growth, JHR maintained close communication with the lessees and operators of each hotel to accurately capture
the growth phase of the accommodation and tourism market while aiming to improve earnings through effective revenue
management, including a high unit price sales strategy with a focus on ADR (Note 1). At the same time, JHR continued to- 4 -work on measures to reduce operating costs and other efforts to improve profitability.
In addition, as part of its internal growth strategy, JHR implemented strategic CAPEX (Capital expenditure) to improveearnings and competitiveness. During the midterm period under review, JHR renovated the guest rooms of Kobe Meriken
Park Oriental Hotel, Oriental Hotel Tokyo Bay, Oriental Hotel Okinawa Resort & Spa and La’gent Stay Sapporo Odori,mainly to improve ADR. Oriental Hotel Okinawa Resort & Spa had been renovating guest rooms sequentially since 2023,
and all renovations were completed by April 2024. Furthermore, during the midterm period under review, JHR
comprehensively renewed the management contracts and the fixed-term building lease contract for the Accor Group Hotels(Note 2). This renewal resulted in a reduction in management contract expenses and other fees, leading to an increase inhotel rents.
Under these circumstances, during the midterm period under review, RevPAR (Note 3) of the 28 Hotels with Variable Rent,
etc. (Note 2) increased by 18.6% year-on-year, significantly exceeding that of the same period in the previous year and GOP(Note 4) was ¥10,954 million, a 29.4% year-on-year increase, due to improved earnings from the growth of theaccommodation and tourism market as well as successful cost management measures at the hotels.
For further details of sales, GOP (gross operating profit) and other management indicators for the 28 Hotels with Variable
Rent, etc., please refer to “<Reference Information 2> Hotel operation indexes, sales and GOP (gross operating profit)” on
page 20.
(Note 1)

(Note 2)

ADR refers to the average guest room unit sales price (Average Daily Rate), which is calculated by dividing the total room sales(including service charges) for a given period by the total number of guest rooms sold for the same period. The same shall apply
hereinafter.
The 28 Hotels with Variable Rent, etc., refer to the 28 hotels, consisting of the 19 HMJ Hotels below, plus the Accor Group
Hotels and the Ishin Group Hotels. HMJ stands for Hotel Management Japan Co., Ltd. (hereinafter referred to as “HMJ”), which
is a group company of the Asset Management Company. The HMJ Group refers to the group HMJ and its subsidiaries (hereinaftercollectively referred to as the “HMJ Group”). The same shall apply hereinafter.
The Five HMJ Hotels refer to the following five hotels JHR leases to HMJ.
Kobe Meriken Park Oriental Hotel
Oriental Hotel Tokyo Bay
Namba Oriental Hotel
Hotel Nikko Alivila
Oriental Hotel Hiroshima
The 19 HMJ Hotels refer to the following 19 hotels: the Five HMJ Hotels plus the following 14 hotels, which JHR leases tosubsidiaries of HMJ.
Oriental Hotel Okinawa Resort & Spa
Sheraton Grand Hiroshima Hotel (main facility of ACTIVE-INTER CITY HIROSHIMA)
Oriental Hotel Fukuoka Hakata Station
Holiday Inn Osaka Namba
Hilton Tokyo Narita Airport
International Garden Hotel Narita
Hotel Nikko Nara
Hotel Oriental Express Osaka Shinsaibashi
Hilton Tokyo Odaiba
Hotel Oriental Express Fukuoka Tenjin
Oriental Hotel Universal City
Oriental Hotel Kyoto Rokujo
Hotel Oriental Express Fukuoka Nakasukawabata
Hotel JAL City Kannai Yokohama
The Accor Group Hotels refer to the following five hotels: ibis Styles Kyoto Station, ibis Styles Sapporo, Mercure Sapporo,
Mercure Okinawa Naha and Mercure Yokosuka.
The Ishin Group Hotels refer to the following four hotels. the b suidobashi, the b ikebukuro, the b hachioji and the b hakata.

(Note 3)(Note 4)

RevPAR represents Revenue Per Available Room, which is calculated by dividing total room sales for a certain period (including
service charges) for a given period by the total number of guest rooms available for sale during the same period. The same shallapply hereinafter.
GOP stands for Gross Operating Profit, which is the amount remaining after deducting expenses related to hotel operations, suchas labor costs and general administrative costs from hotel sales. The same shall apply hereafter.

- 5 -(c) Funding status
In the mid-term period under review, JHR borrowed ¥31,789 million in total and refinanced the existing loans that were due
for repayment with long-term loans with a maximum term of six years. For ¥27,989 million of the loans, JHR sought toincrease the fixed interest ratio by borrowing at fixed interest rates or by fixing interest rates through swap interest contracts.
In addition, JHR borrowed ¥3,300 million as green loans during the mid-term period under review.
Consequently, the balance of interest-bearing debt at the end of the midterm period under review totaled ¥175,231 million,of which ¥14,100 million was the current portion of long-term loans payable, ¥124,231 million was long-term loans payable,¥3,000 million was the current portion of investment corporation bonds and ¥33,900 million was investment corporation
bonds. The ratio of interest-bearing debt to total assets (Note) at the end of the midterm was 41.6%, and the ratio of fixedinterest rate debt to total interest-bearing debt at the end of the midterm period under review was 73.8%.
For the midterm period under review, in addition to ¥33,656 million procured through the public offering announced in June
2024 and the third-party allotment in July 2024, JHR borrowed ¥30,000 million in July 2024 to fund the acquisition of
MIMARU Tokyo Shinjuku West, HOTEL AMANEK Shinjuku-Kabukicho, OKINAWA HARBORVIEW HOTEL andSouthern Beach Hotel & Resort OKINAWA. The maximum loan period was approximately seven years to lengthen the loan
period and diversify repayment dates, and the lender formation was further strengthened with three new lenders, Daiwa Next
Bank, Ltd., the Bank of Okinawa, Ltd., and Bank of the Ryukyus, Limited. For ¥22,000 million of the borrowing in July,JHR seeks to secure a certain fixed interest rate ratio by borrowing at fixed interest rates or by fixing interest rates throughswap interest contracts.
(Note)The ratio of interest-bearing debt to total assets at the end of the midterm period = Balance of interest-bearing debt at the end of
the midterm period ÷ Total assets at the end of the midterm period × 100

JHR’s issuer ratings as of the end of the midterm period under review are as follows:
Rating agency

Rating details

Japan Credit Rating Agency, Ltd. (JCR)

Long-term Issuer Rating: A+

Outlook: Stable

Rating and Investment Information, Inc. (R&I)

Issuer Rating: A

Rating Outlook: Stable(d) Financial results
As a result of the abovementioned asset management, for the mid-term period under review, JHR recorded operating revenueof ¥14,362 million, operating income of ¥8,498 million and ordinary income of ¥7,434 million and net income of ¥7,433
million. Operating revenue includes the variable rents of ¥4,042 million received from the hotels leased to the HMJ Group.
This amount is calculated based on the AGOP (Note) of each hotel of the 19 HMJ Hotels for the mid-term period underreview. The variable rent to be ultimately received from the 19 HMJ Hotels will be determined by the full-year AGOP (12month period) of each hotel of the 19 HMJ Hotels.
JHR settles accounts on an annual basis and investment corporations do not have a system for interim dividends under theInvestment Trusts Act. Accordingly, no distribution of earnings can be made in the midterm period under review. Distributionof earnings will be made based on the earnings for the full year (12-month period from January 1, 2024 to December 31,2024). With regard to such distribution of earnings, earnings exceeding 90% of JHR’s distributable profit as defined by
Article 67-15 of the Act on Special Measures Concerning Taxation (Act No. 26 of 1957; as amended; hereinafter called “theAct on Special Measures Concerning Taxation”) will be distributed.
(Note)AGOP (Adjusted GOP) is the amount remaining after deducting certain payments of fees, etc., from GOP. The same shall apply
hereafter.

(B) Outlook for the second half of the fiscal year(a) Investment policies and issues to be addressed
Regarding the outlook for the Japanese economy, although it is necessary to continue closely monitoring the effects of rising
prices, fluctuations in financial and capital markets, and international developments, the economy is expected to continue its
gradual recovery due to improvements in the employment and income environment as well as the effects of various policies.
With regard to demand related to inbound tourism, although there are concerns about the impact of rising prices and other- 6 -factors, JHR believes domestic travel needs are firm and are expected to remain solid. Inbound demand is exceeding the prepandemic levels in many Western and Southeast Asian countries, and further recovery is expected in China, where recovery
has been slow, especially for individual travel. The number of inbound visitors in 2024 is expected to surpass 2019, reachingan all-time high.
JHR aims to achieve ADR-driven RevPAR growth by proactively capturing demand in the strong accommodation market
and implementing a high unit-price sales strategy. At the same time, JHR will strive to increase sales in the nonaccommodation sector through effective efforts on both the hardware side, including renovation, and the software side, suchas service improvements. In terms of costs, JHR will continue to enhance profitability by maintaining efficient operations
through the review of each hotel's operation, which has been realized in collaboration with lessees and operators. Additionally,
as demand recovers, JHR will optimize resources to further improve profitability. In addition, JHR plans to select hotels withparticularly high growth potential and renovate them through strategic CAPEX with the aim of increasing room sales, etc.
JHR will also aim to realize upside from lease contract renewals and other factors following the first half of 2024. Specifically,
JHR realized an increase in the fixed rent for the b ikebukuro, the b hachioji and the b hakata of the Ishin Group Hotels from
August 2024 upon the expiration of their fixed-term building lease contracts. Furthermore, for Hotel Francs, whose fixedterm lease contract expires in October 2024, a revised contract has been concluded under the condition that variable rent will
be introduced in addition to the previous fixed rent scheme, resulting in an increase in rent.
Given the large potential demand for overseas tourism globally, particularly due to the improvement in income levels in
Asian countries and the popularity of Japan as a travel destination, etc., JHR expects Japan’s accommodation demand frominbound visitors will keep growing over the medium-to-long term and believes that the accommodation and tourism market
will expand. JHR considers that the asset management capability of the Asset Management Company will particularly leadto the differentiation of the hotels’ performance, in addition to their locations, competitiveness and their operator’s capability(including the operator’s ability to differentiate the hotels they operate from other hotels, improve profitability including costmanagement and capture recovering demand).
Under this recognition of the environment, JHR, together with the Asset Management Company, will continue to implementa differentiation strategy that leverages its experience as a J-REIT specializing in hotels and will manage its properties inaccordance with the following policy.
Under the recognition of such circumstances, JHR, together with the Asset Management Company, will continue to
implement a differentiation strategy that leverages the experience it has accumulated as a J-REIT specializing in hotels andwill manage its properties according to the following policy.
Internal growth
JHR will secure stability mainly through fixed rents and upside potential through the implementation of an active asset
management strategy that actively seeks to improve property profitability and asset value through various means, including
the adoption of brands that match the characteristics of the hotel and coordination with the HMJ Group.
For fixed-rent properties, JHR will continue to focus on setting and maintaining appropriate rents, considering either themarket rent level where each hotel is situated, or the lessee’s creditworthiness and capacity to bear the rent. Additionally,
JHR intends to increase rents (including the introduction of a revenue-sharing rent) in alignment with the accommodation
market’s conditions.
For hotels under variable rent contracts and a management contract structure, JHR is working to increase variable rents, etc.,
by implementing the active asset management strategy.
(i) Properties under variable rent contracts
JHR works to enhance the profitability of its properties under variable rent contracts through its active asset management
strategies. JHR adopts world-leading international brands such as Hilton, Sheraton, Mercure and Holiday Inn as well as
leading brands in Japan including Oriental Hotel (a brand of the HMJ Group) and Hotel Nikko and, together with excellent
operators, aims to increase variable rents, etc. through improved performance of these hotels.
JHR is collaborating with operators to enhance hotel performance by requesting them to realize synergy effects through- 7 -implementing marketing strategies to capture a wide range of demand given the expansion of domestic and inbound leisureneeds, taking measures to maintain and raise sales unit prices, and reducing costs by managing multiple properties.
Meanwhile, JHR will continue to work closely with the lessees and operators of each hotel to create attractive products andprovide added value by fully utilizing the characteristics of the owned properties, effective marketing measures, andexpansion of sales channels in order to capture domestic and overseas demand in the future. At the same time, JHR willcontinue to promote various measures to increase hotel revenues through cost management and streamlining of operations.
Moreover, JHR will strive to improve hotel earnings by accurately grasping the conditions in the domestic accommodationand tourism market, including the changing needs of guests, and implementing strategic CAPEX as necessary. The guest
room renovations of Kobe Meriken Park Oriental Hotel and Oriental Hotel Tokyo Bay, which have been implemented since2023, will be continued in the second half of 2024. Additionally, JHR plans to conduct renovation work on the lobby floor,
which will involve temporary closure and the construction of new guest rooms at Namba Oriental Hotel.
(ii) Properties under fixed rent contracts
JHR will appropriately monitor the operating status of each hotel and pay careful attention to each lessee’s ability to bear
the cost of rent. JHR will negotiate rent increases and the introduction of variable rent with hotels whose performance andrent-bearing capacity have recovered in order to increase JHR’s revenue from these hotels. In addition, JHR willcontinuously execute investments to maintain and renew facilities and equipment in order to ensure that each hotel becomesprominent in the market and to maintain and enhance asset value.
External growth
In terms of external growth strategy, JHR will continue targeting the acquisition of highly competitive Real Estate for Hotels,
etc. (Hotel Assets) in areas which can expect “domestic and inbound leisure demand” over the medium to long term. In
addition, JHR will build a portfolio which can secure stable revenues with future growth potential in mind in order to achieve
upside gains.
Upon acquiring properties, JHR will focus on the infrastructure aspects of the relevant Hotel Assets such as buildings andfacilities and service aspects such as the credibility of the hotel lessee and operator (including the ability of the hotel lessee
to bear the cost of rent) as well as operation and management capabilities, and the properties’ locational superiority thatserves as the base for stability in demand and growth potential.
Specifically, JHR will aim to invest in “full-service hotels” and “resort hotels” that pose barriers to new openings due to suchfactors as operation and management know-how required for operating the hotels and limitations in terms of invested capitaland location. As for “limited-service hotels,” JHR emphasizes the credibility and operation capabilities of the hotel lessee
and operator as well as the building age, location, guestroom composition, profitability, etc., of the properties. Moreover,
JHR will take a particularly selective approach to hotels specialized for accommodation and of a budget type (low pricezone) that mainly offers single rooms and where the source of competitiveness relies only on prices.
In the hotel trading market, against the backdrop of further growth expectations in the hotel industry, along with a more
flexible lending stance by financial institutions, not only foreign investors but also domestic investors, including J-REITs,
are actively considering investment in hotels. This could lead to a further increase in active buying and selling of hotels.
Going forward, while closely monitoring market trends from many angles, JHR will flexibly respond to changes in theearnings structures of hotels and the investment environment by leveraging the strengths and advantages it has cultivated asa J-REIT specializing in hotels and JHR will aim to expand asset size that accompanies improvement of the portfolio quality
through acquiring highly competitive properties while utilizing the operation platform of the HMJ Group as necessary.
Finance strategy
JHR will focus on enhancing financial stability and soundness and intends to maintain and improve the relationship of trustwith the financial institutions with which it does business through close communication, which will strengthen the lenderformation.
With the hotel market transitioning into a growth phase, JHR aims to secure a certain fixed interest ratio, lengthen loan terms,
and diversify loan maturities while paying attention to borrowing costs. At the same time, JHR will strengthen its financial- 8 -base by inviting new lenders and controlling capital expenditures appropriately. The ratio of interest-bearing debt to total
assets will be maintained at or below 50% as before. In addition, JHR will further diversify its financing methods, including
consideration of issuing investment corporation bonds and utilizing green finance.
Policy on handling of negative goodwill
From the fiscal year ended December 31, 2017 (18th period), JHR started appropriation for dividends through reversal ofreserve for temporary difference adjustment in connection with partial amendments to the “Ordinance on Accounting ofInvestment Corporations” (Cabinet Office Ordinance No. 47 of 2006, as amended; hereinafter referred to as the “Ordinanceon Accountings of Investment Corporations”) and the “Regulation for Real Estate Investment Trusts and Real Estate
Investment Corporations” of The Investment Trusts Association, Japan. JHR stipulated a policy to reverse ¥262 million(hereinafter called the “50-year amortization amount of negative goodwill”), which is an amount equivalent to 2% (1/50) of
the balance of the reserve for temporary difference adjustment for the fiscal year ended December 31, 2017, to pay out as
dividends every year, with the balance of the reserve for temporary difference adjustment remaining at the time of reversal
set as the maximum reversal amount (Note).
Furthermore, in cases of incurrence of losses caused by property dispositions, impairment loss of assets, dilution of dividend
per unit due to the issuance of new investment units through public offerings, etc., loss on retirement of noncurrent assets,
and suspension of sales and such due to large-scale renovations with significant impact on revenues, JHR stipulated a policy
to reverse additional portion of the negative goodwill on top of the 50-year amortization amount of negative goodwill (¥262
million) (Note).
(Note)The policy may change due to a resolution of the board of directors, and it does not guarantee the method of reversing the reserve
for temporary difference adjustment and amounts to be reversed, etc., in the future.

Initiatives for sustainability
In recent years, consideration for ESG (Environment, Social, and Governance) has grown in importance in the investment
management industry from the standpoint of long-term sustainability. JHR recognizes that conducting real estate investment
management with consideration for ESG is important to maximize unitholder value and to further raise the attractiveness of
JHR further. In addition, JHR believes that it is indispensable to establish favorable relationships with its stakeholders,
including unitholders, hotel guests, lessees, operators, business partners such as property managers, local communities, andofficers and employees of the Asset Management Company, and to fulfill our social responsibilities expected from each ofthem.
In order to put these ideas into practice, JHR, together with the Asset Management Company, has established “Sustainability
Policy” as guidance for its ESG initiatives, promoting efforts to reduce environmental impact on properties in our portfolio
based on this policy. JHR will continue to recognize its social responsibility toward the community as a J-REIT specializing
in hotels and will actively engage in social contribution activities that leverage the unique characteristics of hotels.
■Identification of Materiality (Key Issues) Related to ESG
In December 2021, JHR identified ESG-related materiality (Key Issues) for JHR from two perspectives: stakeholder
expectations and the impact on JHR's business.
■Acquisition of Third-Party Certifications Related to ESG and Green Buildings
JHR has acquired the following third-party certifications related to ESG and green buildings to ensure the reliability andobjectivity of its efforts to reduce environmental impact.
・GRESB (Note 1) Real Estate Assessment
JHR was named "Sector Leader" in the Asian Hotel Sector in the 2023 GRESB Real Estate Assessment for the fourthconsecutive year.
・BELS (Note 2) Certification
JHR acquired the Building-Housing Energy-efficiency Labeling System (BELS) Certification for Hotel Nikko Alivila
and Mercure Okinawa Naha in February 2018 for UAN kanazawa in February 2024, bringing the total number of BELScertified properties in JHR’s portfolio to three.

- 9 -・CASBEE (Note 3) Certification for Buildings
In April 2020, Hilton Tokyo Odaiba obtained CASBEE (Comprehensive Assessment System for Built Environment
Efficiency) Certification for Buildings, marking the first such recognition for an existing hotel property. In May 2021,
Oriental Hotel Fukuoka Hakata Station also received CASBEE Certification for Buildings.
■Initiatives for Climate Change
The Asset Management Company has expressed its support for the recommendations of the Task Force on Climaterelated Financial Disclosures (TCFD), established by the Financial Stability Board (FSB), and has joined the TCFD
Consortium, an organization of Japanese companies that support the TCFD recommendations.
In August 2022, JHR disclosed its efforts to address the four disclosure themes recommended by the TCFD, including
the financial impact of climate change scenario analysis. JHR is also progressively clarifying its numerical targets by
establishing and disclosing a CO2 reduction target by 2050 in February 2023.
■Formulation of Green Finance Framework
In January 2024, JHR formulated the Green Finance Framework as a framework for financing environmentally friendly
projects. In March 2024, JHR borrowed ¥3,300 million as a green loan under the framework. JHR will continue to strive
to promote initiatives for environmental improvement by utilizing funds procured under the framework.
■Release of ESG Report
Since March 2023, JHR has been publishing an ESG report annually. Together with Asset Management Company, JHR
will continue to actively promote and expand various sustainability initiatives and disclosures.
(Note 1)

(Note 2)
(Note 3)GRESB, which stands for Global Real Estate Sustainability Benchmark, is an annual benchmarking assessment to measure ESG(Environmental, Social and Governance) considerations of real estate companies and funds. It evaluates initiatives for thesustainability of real estate companies, REITs and real estate funds, not of individual properties. The GRESB Rating makes
relative assessment based on total scores, with 5 Stars being the highest ranking.
BELS (Building-Housing Energy-Efficiency Labeling System) is a display system of energy conservation performance of abuilding set by the Ministry of Land, Infrastructure, Transport and Tourism.
CASBEE (Comprehensive Assessment System for Built Environment Efficiency) is a system for evaluating and rating theenvironmental performance of buildings. In addition to environmental considerations such as energy conservation and the use ofmaterials and equipment with low environmental impact, it comprehensively evaluates the quality of buildings, including
consideration for interior comfort and landscaping.

- 10 -

(b) Significant subsequent events(i) Acquisition of assets
JHR acquired the following assets on July 12, 2024 and July 31, 2024.
Name of acquired asset

MIMARU Tokyo Shinjuku West

Asset category

Real estate beneficial interest in trust and movable assets attached to the hotel

Asset type

Hotel

Adress3-11 Nishi-Shinjuku 3-chome, Shinjuku-ku, Tokyo

Acquisition dateJuly 12, 2024

SellerNot disclosed (Note 1)

Acquisition price (Note 2)¥9,645 million(Note 1) Undisclosed as consent of the tenant has not been obtained.
(Note 2) The acquisition price does not include expenses for acquisition, settlement of property tax, city planning tax, etc., and consumption tax andlocal consumption tax.

Name of acquired asset

HOTEL AMANEK Shinjuku-Kabukicho.

Asset category

Real estate beneficial interest in trust

Asset type

Hotel

Adress24-10 Kabukicho 2-chome, Shinjuku-ku, Tokyo

Acquisition dateJuly 12, 2024

SellerNot disclosed (Note 1)

Acquisition price (Note 2)¥8,845 million(Note 1) Undisclosed as consent of the tenant has not been obtained.
(Note 2) The acquisition price does not include expenses for acquisition, settlement of property tax, city planning tax, etc., and consumption tax andlocal consumption tax.

Name of acquired asset

OKINAWA HARBORVIEW HOTEL

Asset category

Real estate beneficial interest in trust and movable assets attached to the hotel

Asset type

Hotel

Adress2-46, Izumizaki, Naha city, Okinawa

Acquisition dateJuly 31, 2024

SellerNot disclosed (Note 1)

Acquisition price (Note 2)¥21,500 million(Note 1) Undisclosed as consent of the tenant has not been obtained.
(Note 2) The acquisition price does not include expenses for acquisition, settlement of property tax, city planning tax, etc., and consumption tax andlocal consumption tax.

Name of acquired asset

Southern Beach Hotel & Resort OKINAWA

Asset category

Real estate beneficial interest in trust and movable assets attached to the hotel

Asset type

Hotel

Adress1-6-1, Nishizakicho, Itoman city, Okinawa

Acquisition dateJuly 31, 2024

SellerNot disclosed (Note 1)

Acquisition price (Note 2)¥16,200 million(Note 1) Undisclosed as consent of the tenant has not been obtained.
(Note 2) The acquisition price does not include expenses for acquisition, settlement of property tax, city planning tax, etc., and consumption tax andlocal consumption tax.

- 11 -

(ii) New loans
JHR procured funds as follows to partially finance the acquisition of real estate beneficial interests in trust and movable
assets attached to the hotels, as described in “1. Acquisition of Assets” above.
Names ofloan

Lenders

Sumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.
Resona Bank, Limited
MUFG Bank, Ltd.
Term Loan
Sumitomo Mitsui Trust Bank,
102
LimitedDevelopment Bank of Japan Inc.
SBI Shinsei Bank, Limited
Kansai Mirai Bank, Limited
Daiwa Next Bank, Ltd
Development Bank of Japan Inc.
Term Loan Bank of the Ryukyus, Limited
103
The Nishi-Nippon City Bank,Ltd.

Term Loan
104

Sumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.
Sumitomo Mitsui Trust Bank,
LimitedResona Bank, Limited
The Bank of Fukuoka, Ltd.
The Chiba Bank, Ltd.
Kansai Mirai Bank, LimitedAozora Bank, Ltd.
The Shizuoka Bank, Ltd.

Term Loan105

MUFG Bank, Ltd.

Term Loan
106

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust Bank,
LimitedResona Bank, Limited
SBI Shinsei Bank, Limited
Daiwa Next Bank, Ltd.
Aozora Bank, Ltd.
The Minato Bank, Ltd.
Kansai Mirai Bank, Limited
The Bank of Okinawa, Ltd.

Term Loan107

MUFG Bank, Ltd.

Amount of the
new loan(JPY1M)

8,000

1,950

Interest rate(*)

Base interest
rate + 0.25%

Base interest
rate + 0.50%

Borrowing date

Maturity date

Collateral / methodof repayment

July 12,2024

Unsecured &Unguaranteed /September 30,
Lump-sum2025
repayment on
the maturity dateJuly 31,2024

March 30,
2029

Unsecured &Unguaranteed /Lump-sum
repayment on
the maturity date

5,850

Base interest
rate + 0.55%

July 31,2024

March 29,
2030

Unsecured &Unguaranteed /Lump-sum
repayment on
the maturity date

500

1.40380%(fixedinterest rate)

July 31,2024

March 29,
2030

Unsecured &Unguaranteed /Lump-sum
repayment on
the maturity date

March 31,
2031

Unsecured &Unguaranteed /Lump-sum
repayment on
the maturity date

March 31,
2031

Unsecured &Unguaranteed /Lump-sum
repayment on
the maturity date

12,700Base interest
rate + 0.60%

1,000

1.51536%(fixedinterest rate)

July 31,2024

July 31,2024(Note) The base interest rate to be applied to the calculation period of the interest to be paid on the interest payment date will be JBA Japanese Yen
TIBOR for one month as of two business days prior to the immediately preceding interest payment date (or, two business days prior to theborrowing date as to the first interest calculation period). However, as to Term Loan 102, JBA Japanese Yen TIBOR for three months will beapplied for the first interest calculation period and JBA Japanese Yen TIBOR for one month will be applied for all other interest calculation
periods.

- 12 -

(iii) Issuance of new investment units
JHR resolved to issue new investment units at the Board of Directors meetings held on June 24, 2024 and June 27, 2024,
and completed the payments on July 3, 2024 and July 30, 2024, under the following conditions.
(i) Issuance of new investment units (domestic public offering and overseas offering)Number of investment unites issued: 451,641 units
Domestic public offering: 221,641 units

Overseas offering: 230,000 units

Issue price: ¥75,558 per unit

Total issue price: ¥34,125,090,678

Paid-in amount (Issue value): ¥73,167

Total paid-in amount (Issue value): ¥33,045,217,047

Payment date

: July 3, 2024(ii) Issuance of new investment units (third-party allotment)
Number of investment unites issued: 8,359 units
Paid-in amount (Issue value): ¥73,167 per unit

Total paid-in amount (Issue value): ¥611,602,953

Payment date

: July 30, 2024

Allottee: SMBC Nikko Securities Inc.

(iii) Use of the proceeds
The proceeds of ¥33,045,217,047 from the issuance of new investment units in the domestic public offering and overseas
offering were allocated to partially fund the acquisition of MIMARU Tokyo Shinjuku West, HOTEL AMANEK ShinjukuKabukicho, OKINAWA HARBORVIEW HOTEL and Southern Beach Hotel & Resort OKINAWA as described in “1.
Acquisition of assets” above. The remainder of the proceeds from the issuance of new investment units in the domestic
public offering and overseas offering, along with ¥611,602,953 from the issuance of new investment units by way of thethird-party allotment, will be retained as cash on hand to partially fund future acquisitions of specified assets or for repairs
and capital expenditures to maintain and improve the competitiveness of existing properties.

- 13 -

(c) Operating forecast(i) Operating result for the midterm of the fiscal year ending December 2024 (25th period)
The actual results of JHR for the midterm of the fiscal year ending December 2024 (25th period), along with the differencesfrom the previous forecast (Note 1), are detailed below. During the period, JHR's operating revenue increased by ¥151
million from the previous forecast, mainly due to an increase in variable rents. Additionally, net income increased by ¥248
million from the previous forecast, primarily due to decreases in operating expenses and non-operating expenses.
Midterm of the fiscal year ending
December 2024 (25th period)

Actual Results

Previous forecast(Note 1)

Difference

Percent change

Operating revenue¥14,362 million¥14,210 million¥151 million

1.1%

Operating income¥8,498 million¥8,264 million¥234 million

2.8%

Ordinary income¥7,434 million¥7,185 million¥248 million

3.5%

Net income¥7,433 million¥7,185 million¥248 million

3.5%(ii) Operating forecast for the full fiscal year ending December 2024 (25th period)
JHR’s operating and dividend forecasts for the full fiscal year ending December 2024 (25th period) are estimated as follows:
Operating revenue is expected to increase by ¥151 million from the previous forecast, mainly due to an increase in variable
rents in the first half. Operating expenses are projected to decrease by ¥82 million after reviewing property-related expenses
and operating expenses. Non-operating expenses are expected to decrease by ¥13 million, mainly due to a reduction in
financial costs. As a result, net income is anticipated to rise by ¥248 million from the previous forecast.
For the assumptions of these forecasts, please refer to “Assumptions of the operating forecast for the full fiscal year ending
December 2024 (25th period)” on page 15.
Full fiscal year ending
December 2024 (25th period)

Current forecast

Previous forecast(Note 1)

Difference

Operating revenue¥32,910 million¥32,758 million¥151 million

0.5%Operating income¥20,198 million¥19,963 million¥234 million

1.2%

Ordinary income¥17,645 million¥17,396 million¥248 million

1.4%

Net income¥17,644 million¥17,395 million¥248 million

1.4%¥3,815¥3,764

¥51

1.4%

¥－

¥－

¥－

－%

Dividend per unit
Dividend per unit resulting fromexcess of earnings(Note 1)
(Note 2)

Percent change

The figures were announced in the “Notice Concerning Revision of Operating and Dividend Forecast for the Fiscal YearEnding December 2024 (25th Period)” dated June 24, 2024. The same shall apply hereinafter.
The forecasted figures above are the current forecasts calculated based on certain assumptions. As such, actual operating
revenue, operating income, ordinary income, net income, dividend per unit and dividend per unit resulting from excess ofearnings may vary due to changes in the circumstances. Furthermore, the forecasts are not intended to guarantee any dividend
amount per unit.

- 14 -

Assumptions of the operating forecast for the full fiscal year ending December 2024 (25th period)
Item
Calculation
PeriodAssumptions
・・

Full fiscal year ending December 2024 (25th Period): January 1, 2024 through December 31, 2024 (366 days)
It is assumed that JHR’s portfolio consists of 51 properties, including 47 properties owned by JHR as of the endof June 2024 (hereinafter referred to as the “Existing Properties”) and the following four properties acquired(hereinafter referred to as the “Acquired Properties”).

Assets underManagement

・

Acquired Properties
Acquisition date

Name

July 12, 2024

MIMARU Tokyo Shinjuku West

July 12, 2024

HOTEL AMANEK Shinjuku-Kabukicho.

July 31, 2024

OKINAWA HARBORVIEW HOTEL

July 31, 2024

Southern Beach Hotel & Resort OKINAWA

It is assumed that there will be no change (acquisition of new property or disposition of the existing properties,etc.) in assets under management through the end of the fiscal year ending December 2024 (25th period).
However, changes in assets under management may take place.

・

Operating revenue is calculated based on the conditions of the lease and other contracts effective as of today,
considering the competitiveness of hotels, market environment and other factors. If there are lease contracts withfacilities other than hotels, such as commercial facilities and offices, operating revenue calculated based on thesaid lease contracts is included.

・Rents, etc., of the main hotels are calculated as follows:(1) The 19 HMJ Hotels
The rent of the 19 HMJ Hotels consists of fixed rent and variable rent, and the variable rent is calculated by thefollowing formula.
Variable rent = [Hotel AGOP (*1) - Base amount] × Variable rent ratio (%)
However, if the AGOP is less than the base amount, the variable rent will be 0 yen.
(Unit: millions of yen)Fixed rent

Variable rent

Total rent

3,221

3,168

6,389

Oriental Hotel Universal City

316

1,492

1,808

Oriental Hotel Okinawa Resort & Spa

550

507

1,057

Sheraton Grand Hiroshima Hotel (*2)

348

396

744

Oriental Hotel Fukuoka Hakata Station

425

1,347

1,772

Holiday Inn Osaka Namba

576

676

1,252

Hotel Oriental Express Fukuoka Tenjin

135

452

587

Hilton Tokyo Narita Airport

444

234

678

International Garden Hotel Narita

336

208

544

Hotel Nikko Nara

420

129

549

Hotel Oriental Express Osaka Shinsaibashi

110

104

214

1,600

1,268

2,868

Oriental Hotel Kyoto Rokujo

171

158

329

Hotel Oriental Express Fukuoka Nakasukawabata

174

166

340

Hotel JAL City Kannai Yokohama

135

51

186

8,962

10,362

19,325The Five HMJ Hotels

Operating
Revenue

Hilton Tokyo Odaiba

Total- 15 -

Item

Assumptions(*1) AGOP (adjusted GOP) is calculated by subtracting certain fees and other items from GOP. GOP (gross operating profit) is
the remainder after expenses incurred in hotel operation, such as personnel costs and general and administrative expenses,
etc., are deducted from total sales. The same shall apply hereinafter.
(*2) Stating the rent for Sheraton Grand Hiroshima Hotel, the major facility of ACTIVE-INTER CITY HIROSHIMA. The
fixed and variable rents from offices and commercial tenants in ACTIVE-INTER CITY HIROSHIMA are as follows.

ACTIVE-INTER CITY HIROSHIMA(offices and commercial tenants)

Fixed rent

Variable rent

502

13

(Unit: millions of yen)
Total rent
516

(2) Income from management contracts (*3) and variable rent from other hotels with variable rent, etc.
(Unit: millions of yen)
Full year

Operating
Revenue

ibis Styles Kyoto Station (*3)

342

ibis Styles Sapporo (*3)

529

Mercure Sapporo (*3)

604

Mercure Okinawa Naha (*3)

269

Mercure Yokosuka

320

the b suidobashi

109

the b ikebukuro

215

the b hachioji

118

the b hakata

166

dormy inn Kumamoto

67

Comfort Hotel Tokyo Higashi Nihombashi

38

Smile Hotel Nihombashi Mitsukoshimae

31

Chisun Hotel Kamata

140

Chisun Inn Kamata

82

Hilton Tokyo Bay

Undisclosed (*4)

Hilton Nagoya

Undisclosed (*4)

UAN kanazawa

16

Sotetsu Fresa Inn Shimbashi-Karasumoriguchi

108

La’gent Stay Sapporo Odori

548

Total

5,001

(*3) Management contract structure is introduced. The management contract structure involves entrusting the management ofowned hotel properties to the management company and incorporating the business results into JHR as real estate operating
revenue. Each hotel’s GOP amount is recognized as management contract revenue and operating revenue.
(*4) Undisclosed since tenants that concluded lease contracts did not agree to disclose rent revenue, etc.

(3) Acquired Properties(a) MIMARU Tokyo Shinjuku West (*5)
The rent consists of fixed rent and variable rent, and the variable rent is calculated by the following formula.
Variable rent = Amount calculated based on Hotel GOP
However, if the calculated amount is below 0 yen, the variable rent will be 0 yen.
(b) HOTEL AMANEK Shinjuku-Kabukicho. (*5)
The rent consists of fixed rent and variable rent, and the variable rent is calculated by the following formula.
Variable rent = Amount calculated based on Hotel GOP
However, if the calculated amount is below 0 yen, the variable rent will be 0 yen.
(c) OKINAWA HARBORVIEW HOTEL (*6)
The rent is fixed rent only until July 31, 2026.

- 16 -

Item

Assumptions(d) Southern Beach Hotel & Resort OKINAWA (*7)
The rent consists of fixed rent and variable rent, and the variable rent is calculated by the following formula.
Variable rent = Amount calculated based on Hotel GOP
However, if the calculated amount is below 0 yen, the variable rent will be 0 yen.
(Unit: millions of yen)Fixed rent

Variable rent

MIMARU Tokyo Shinjuku West

Undisclosed (*5)

Undisclosed (*5)

187

HOTEL AMANEK Shinjuku-Kabukicho.

Undisclosed (*5)

Undisclosed (*5)

233

OKINAWA HARBORVIEW HOTEL

440 (*6)－

440

Southern Beach Hotel & Resort OKINAWA

257 (*7)

107 (*7)

365

904

321

1,225

Total
Operating
Revenue

Total rent(*5) Undisclosed since tenants that concluded lease contracts did not agree to disclose rent revenue, etc. The rent for the fiscal
year ending December 2024 is an estimated amount for 173-day from July 12, 2024 to December 31, 2024.
(*6) The annual fixed rent will be 1,050 million yen until July 31, 2026. The rent for the fiscal year ending December 2024 isan estimated amount for 154-day from July 31, 2024 to December 31, 2024.
(*7) The annual fixed rent will be 600 million yen. The rent for the fiscal year ending December 2024 is an estimated amountincluding the rent from commercial tenants for 154-day from July 31, 2024 to December 31, 2024.

The following is the breakdown of variable rent and income from management contracts.
(Unit: millions of yen)
Full year
The 19 HMJ Hotels

10,362Other hotels with variable rent, etc.

5,001

Acquired Properties

321

Office and commercial tenants

13

Total

15,699(*8) For details of variable rent, please refer to “3. Reference Information; (1) Information on values of assets undermanagement, etc. B. Assets under management; (C) Other major assets under management; (iii) Overview of the hotelbusiness; a. Rent structures of hotels with variable rent, management contract or revenue sharing.”

・ With respect to real estate operating costs, which constitute a major part of the operating expenses, expenses otherthan depreciation are calculated based on historical data, and variable factors are reflected in the calculation.
・ It is assumed that ¥2,093 million will be recognized as expenses for fixed asset taxes, city planning taxes, etc. In
general, fixed asset taxes and city planning taxes for the year of acquisition on acquired assets are settled with theprevious owner on a pro-rata basis over a period of time, and the amount equivalent to such settlement is includedin the acquisition cost. Therefore, the fixed asset taxes, city planning tax, etc., of the Acquired Properties are notposted as expenses for the relevant calculation period.
・ Capital expenditure is assumed to be ¥7,311 million (¥3,745 million for capital expenditure I, ¥400 million for
capital expenditure II and ¥3,165 million for capital expenditure III) for the fiscal year ending December 2024
OperatingExpenses(25th period).
(*) JHR classifies capital expenditures into the following three categories. (I) Capital investment related to the renewal of equipment
and facilities of buildings which is required to maintain proper values of properties, (II) capital investment for fixtures, furniture,and equipment that are not directly related to the building structure or facilities but necessary for operating hotels, and (III) strategic
capital investment such as renovating guest rooms, etc. for improving the competitiveness of the hotels.

・ Depreciation is calculated using the straight-line method including the planned capital expenditures above and isassumed to be ¥5,630 million.
・ Repair expenses for buildings are recognized as expenses in the assumed amount necessary for each operating
period. Please note that the repair expenses of each operating period may differ materially from the forecast
amount for various reasons, such as; (1) Emergency repair expenses may be necessary due to damage to buildings
from unexpected causes; (2) The amount of repair expenses generally tends to increase in difference over time;and (3) Repair expenses are not required regularly.
Non-operating ・ ¥2,554 million is expected as non-operating expenses for borrowing-related costs and other expenses. BorrowingExpenses
related costs include interest expense, amortization for financing fees, and arrangement fee.
- 17 -

Item

Assumptions
・ The balance of interest-bearing debt (sum of loans and investment corporation bonds) as of today is ¥205,231
million, and it is assumed to remain unchanged until the end of the fiscal year ending December 31, 2024 (25thInterestbearing Debt

period).
・ It is assumed that loans totaling ¥6,100 million due by the end of the fiscal year ending December 2024 (25thperiod) will be fully refinanced.
・ It is assumed that the ¥1,000 million of investment corporation bonds due for redemption by the end of the fiscal
year ending December 2024 (25th period) will be fully redeemed through borrowing funds or issuing investment
corporation bonds.
・ Dividend per unit for the fiscal year ending December 2024 (25th period) is calculated based on the following
assumptions.
Unappropriated retained earnings¥17,646 million

Reversal of reserve for temporary difference adjustment (negative goodwill)
50-year amortization amount of negative goodwill (*1)¥262 million

Loss on retirement of noncurrent assets (*2)¥243 million

Amortization of trademark rights (*3)

¥56 million

Dilution (*4)

¥1,240 million

Distributable amount¥19,448 million

Total number of investment units issued

5,097,006 units

Dividend per unit
Dividend
per Unit¥3,815(*1) ¥262 million (hereinafter called “50-year amortization amount of negative goodwill”) is scheduled to be paid out as
dividends, with the remaining balance of the reserve for temporary difference adjustment set as the maximum amount, forevery fiscal year.
(*2) The amount recognized as a loss on retirement of noncurrent assets will be appropriated by the reserve for temporary
difference adjustment (negative goodwill) and is expected to have no impact on the dividend per unit.
(*3) The trademark rights are amortized over ten years using the straight-line method. The amortization amount to be recorded
this current fiscal year will have no impact on the dividend per unit due to the appropriation of the reserve for temporary
difference adjustment (negative goodwill).
(*4) Regarding the dividend per unit for the fiscal year ending December 2024 (25th period), JHR plans to allocate the reserve
for temporary difference adjustment (negative goodwill) to a level that factors in the internal growth of the Existing
Properties as a measure to offset the dilution of investment units caused by the issuance of new units for purchasing theAcquired Properties.

・ Dividend per unit may fluctuate due to various causes, such as fluctuation of rent revenue resulting from thetransfer of assets under management, change of tenants, etc., at hotels, change in the business environment of hotelbusiness for hotel tenants, etc., unexpected repairs, and an actual number of new investment units issued, etc.
・ The remaining balance of the reserve for temporary difference adjustment (negative goodwill) after theappropriation of the reserve for temporary difference adjustment (negative goodwill) for dividends for the fiscal
year ending December 2024 (25th period) is expected to be ¥6,952 million.
Dividend per
Unit
Resultingfrom Excessof Earnings

・ It is assumed that the excess of earnings (dividend per unit resulting from an excess of earnings) will not be
distributed.
・ It is assumed that there will be no amendments to laws and regulations, the tax system, accounting standards,

Otherslisting rules, or the regulations of The Investment Trusts Association, Japan, etc., that will affect the above forecast
figures.
・ It is assumed that unexpected major incidents will not occur in the general economy, real estate market, hotelbusiness environment, etc.
・ The numerical values are rounded down to the nearest millions of yen in the assumptions above.

- 18 -

<Reference Information 1>
Highlight of operating forecast and dividend estimate
Comparison of operational forecast and estimated dividend for the full fiscal year ending December 2024 (25th period) (current
forecast) with the previous forecast and main reasons for the difference(Unit: millions of yen)

Dividend

Profit and Loss

Properties

FY12/2024
FY12/2024(25th Period) (25th Period)(*)

Previous
Forecast

Current
Forecast(A)(B)

Difference% ofincrease/decrease(B)-(A)

Existing Acquired
Properties Properties

Factors Causing Variance

No. of Properties

51

51

－

－

－

－

Acquisition Price

453,108

453,108

－

－

－

－

Operating Revenue

32,75832,910

151

0.5%

151

－

Real Estate
Operating Revenue

32,75832,910

151

0.5%

151

－

Fixed Rent

16,12816,128(0)(0.0%)(0)－Composition

50.9%

50.7%

Variable Rent

15,562

15,699

136

0.9%

136

－ The Accor Group Hotels: (JPY5MM)

Composition

49.1%

49.3%

The 19 HMJ Hotels: +JPY146MM

The Ishin Group Hotels: +JPY6MM
Others: (JPY10MM)

Other Income

1,067

1,082

15

1.5%

15

－

NOI (*)

28,331

28,484

152

0.5%

152

－

150

0.7%

150

－

NOI Yield (*)

6.3%

6.3%

NOI after Depreciation (*)

22,45822,608NOI Yield after Depreciation (*)

5.0%

5.0%

Operating Income

19,963

20,198234

1.2%

Ordinary Income

17,396

17,645248

1.4%

Net Income

17,395

17,644248

1.4%

Amount of Reversal from Reserve
for Temporary Difference
Adjustments(Negative Goodwill)

1,789

1,802

12

Total Dividends

19,185

19,445259

No. of Unit Issued (Unit)

5,097,006

5,097,006－

Dividend per Unit (JPY)

3,764

3,815

51

Amount of reversal from reserve for temporary difference
adjustments
0.7% Previous Forecast:
50-year amortization amount on negative goodwill: JPY262MM
Loss on retirement of noncurrent assets: JPY231MM
Amortization of trademark rights: JPY56MM
1.4% Dilution: JPY1,240MM
Current Forecast:
50-year amortization amount on negative goodwill: JPY262MM
Loss on retirement of noncurrent assets: JPY243MM
1.4% Amortization of trademark rights: JPY56MM
Dilution: JPY1,240MM－

Each figure is calculated using the following formulas. The same shall apply hereinafter.
NOI (Net Operating Income) = Real estate operating revenue – Real estate operating costs + Depreciation+ Loss on retirement of noncurrent assets + Asset retirement obligations expenses
NOI yield = NOI ÷ acquisition price
NOI after depreciation = Real estate operating revenue – Real estate operating costs
NOI yield after depreciation = NOI after depreciation ÷ acquisition price- 19 -

<Reference Information 2>
Hotel operation indexes, sales, and GOP (gross operating profit)
The numeral figures are based on figures obtained from hotel lessees, etc. Please note that these figures have not been
audited nor have they gone through other procedures. No guarantee is made as to the accuracy or completeness of the
figures and information.
ADR (Note 1) and RevPAR (Note 2) are rounded off to the nearest yen. Sales and GOP are rounded off to the nearest
millions of yen. Occupancy rate and comparison with the previous period are rounded off to one decimal place.
<1> The 19 HMJ Hotels
Fiscal year ended December 2023
ResultFiscal year ending December 2024

Comparison withprevious fiscal year

Previous forecast

Current forecast

Comparison withprevious fiscal year

Comparison withprevious forecast

75.8%

21.2pt

81.8%

81.7%

5.9pt

(0.1pt)Occupancy
rate

First half ofthe year
Second half ofthe year

81.3%

7.8pt

84.8%

84.8%

3.5pt

－

Full year

78.6%

14.4pt

83.3%

83.3%

4.7pt

(0.0pt)18,05546.9%

19,71519,806

9.7%

0.5%

ADR
(JPY)

First half ofthe year
Second half ofthe year

21,28623.8%

22,99922,9998.0%－

Full year

19,74030.6%

21,396

21,4418.6%

0.2%

13,685103.8%

16,123

16,183

18.3%

0.4%

RevPAR(JPY)

First half ofthe year
Second half ofthe year

17,30237.1%

19,507

19,507

12.7%－

Full year

15,50860.0%

17,824

17,854

15.1%

0.2%

23,94788.3%

27,53027,605

15.3%

0.3%

14,564123.5%

17,254

17,319

18.9%

0.4%

7,972

70.6%

9,157

9,164

15.0%

0.1%

Others

1,411(7.9%)

1,120

1,122

(20.5%)

0.2%

Sales (JPY1M)

29,37333.3%

33,19033,19013.0%－

Rooms dept.

18,72050.3%

21,105

21,105

12.7%

－

9,335

16.0%

10,915

10,915

16.9%－

Sales (JPY1M)
Rooms dept.
F&B dept.

F&B dept.

First half ofthe year

Second half ofthe year

Others

1,317(13.7%)

1,170

1,170

(11.2%)－

Sales (JPY1M)

53,32053.4%

60,72160,795

14.0%

0.1%

Rooms dept.

33,28475.5%

38,35938,424

15.4%

0.2%

17,30736.0%

20,072

20,079

16.0%

0.0%

2,729

(10.8%)

2,290

2,292

(16.0%)

0.1%

F&B dept.

Full year

OthersGOP(JPY1M)First half ofthe year
Second half ofthe year

7,464

386.0%

9,349

9,550

28.0%

2.1%

10,935

75.8%

12,577

12,57715.0%－

Full year

18,399137.2%

21,92622,127

20.3%

0.9%

(Note 1) ADR: This represents the average daily rate, calculated by dividing total room revenue for a certain period (including service charges) by
the total number of rooms sold during the period. The same shall apply hereinafter.
(Note 2) RevPAR: This represents revenue per available room, calculated by dividing total room revenue for a certain period (including service
charges) by the total number of rooms available for sale during the period. The same shall apply hereinafter.

- 20 -

<2> The 28 Hotels with Variable Rent, etc.
Fiscal year ended December 2023
ResultFiscal year ending December 2024

Comparison withprevious fiscal year

Previous forecast

Current forecast

Comparison withprevious fiscal year

Comparison withprevious forecast

75.9%

20.1pt

81.2%

81.1%

5.2pt

(0.1pt)Occupancy
rate

First half ofthe year
Second half ofthe year

80.8%

6.6pt

84.6%

84.6%

3.7pt

－

Full year

78.4%

13.3pt

82.9%

82.8%

4.5pt

(0.1pt)16,22749.3%

17,95518,014

11.0%

0.3%

ADR
(JPY)

First half ofthe year
Second half ofthe year

19,184

27.7%

20,57820,578

7.3%－

Full year

17,76434.0%

19,30019,3308.8%

0.2%

12,311103.0%

14,575

14,601

18.6%

0.2%

RevPAR(JPY)

First half ofthe year
Second half ofthe year

15,50439.2%

17,40017,400

12.2%－

Full year

13,92061.4%

15,99516,008

15.0%

0.1%

27,04688.3%

31,34331,388

16.1%

0.1%

17,209117.7%

20,487

20,523

19.3%

0.2%

8,345

71.9%

9,657

9,664

15.8%

0.1%

Others

1,492(6.9%)

1,199

1,202

(19.5%)

0.2%

Sales (JPY1M)

33,20334.2%

37,46937,469

12.8%－

Rooms dept.

22,031

49.2%

24,726

24,726

12.2%

－

9,778

17.0%

11,488

11,488

17.5%－

Sales (JPY1M)
Rooms dept.
F&B dept.

F&B dept.

First half ofthe year

Second half ofthe year

Others

1,393(13.7%)

1,254

1,254

(10.0%)－

Sales (JPY1M)

60,24954.1%

68,812

68,857

14.3%

0.1%

Rooms dept.

39,24073.1%

45,21345,248

15.3%

0.1%

18,12437.2%

21,14621,153

16.7%

0.0%

2,885

(10.3%)

2,453

2,456

(14.9%)

0.1%

F&B dept.

Full year

OthersGOP(JPY1M)First half ofthe year
Second half ofthe year

8,462

365.2%

10,752

10,95429.4%

12,38875.6%

14,25914,259

15.1%

1.9%

Full year

20,849134.9%

25,011

25,213

20.9%

0.8%

- 21 -－

2.

Semi-annual financial statements(1) Semi-annual balance sheets
As of
December 31, 2023

AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Income taxes receivable
Derivatives
Other
Total current assets
Noncurrent assets
Property and equipment, at cost
Machinery and equipment
Accumulated depreciation
Machinery and equipment, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Construction in progress
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Construction in progress in trust
Net property and equipment
Intangible assets
SoftwareTrademark rightLeasehold rights in trust
Fixed-term leasehold rights in trust
Other
Total intangible assets
Investments and other assets
Security deposits
Leasehold and security deposits in trust
Long-term prepaid expenses
Derivative assets
Reserve for repairs and maintenanceTotal investments and other assets
Total noncurrent assets
Deferred assets
Investment unit issuance costs
Investment corporation bond issuance costs
Total deferred assets
Total assets- 22 -(Unit: thousands of yen)
As ofJune 30, 2024

17,693,462
10,821,626
4,850,631
626,30838
1,499
56,376
34,049,942

10,197,526
11,396,483
3,254,145
656,227－
8,697
241,668
25,754,748

949,797(451,651)
498,146
6,865,827(4,507,557)
2,358,270
11,434*1 152,039,254(35,463,200)
116,576,053
3,058,840(730,047)
2,328,793
793,859(264,608)
529,250
129,718(113,038)
16,680237,641,649
120,897
360,081,175

1,006,655(497,110)
509,545
7,381,019(4,829,556)
2,551,463
11,434*1 153,168,149(37,471,420)
115,696,729
3,062,982(767,071)
2,295,911
804,579(284,922)
519,656
129,718(113,776)
15,942
237,641,649
507,098359,749,429

226,128355,231
27,324,752
4,360,378
4,561
32,271,051

215,608
327,186
27,324,752
4,292,775
4,221
32,164,544

12,520139,668
2,565,747
398,477
300,469
3,416,883
395,769,110

12,520139,6682,686,036
795,076
288,510
3,921,812
395,835,786

40,37995,957
136,336
429,955,390

32,32480,573112,898
421,703,433

(Unit: thousands of yen)
As ofDecember 31, 2023
Liabilities
Current liabilities
Operating accounts payable
Short-term loans
Current portion of investment corporation bonds
payableCurrent portion of long-term loans payable
Accrued expenses
Income taxes payable
Consumption taxes payable
Advances received
Dividends payable
Deposits received
Derivative liabilities
Other
Total current liabilities
Long-term liabilities
Investment corporation bonds
Long-term loans payable
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Derivative liabilities
Deferred tax liabilities
Asset retirement obligations
Total long-term liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
SurplusCapital surplus
Voluntary reserve
Reserve for temporary difference adjustment
Reserve for tax purpose reduction entry
Total voluntary reserve
Unappropriated retained earnings(undisposed loss)
Total surplus
Total unitholders’ equity
Valuation and translation adjustments
Deferred gains (losses) on hedges
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

2,506,632
15,568,000

485,303－3,000,000

3,000,000

21,521,000
659,264
1,210
470,254764,638
3,634
9,966
2,626
77,81644,585,044

14,100,000
625,389605
410,069
770,918
11,5889,741－
31,80019,445,416

33,900,000
101,242,000
1,040,520
3,739,687
1,951
125,832
340,051
140,390,042
184,975,086

33,900,000
124,231,000
1,040,520
3,778,249－
252,867
340,874
163,543,511
182,988,927

199,051,879

199,051,879

21,746,398

21,746,398*2 9,600,013*2 8,754,629

13,137,051

7,435,831

45,658,325
244,710,204

39,111,719
238,163,599

270,099
270,099*3 244,980,303
429,955,390

550,906
550,906*3 238,714,505
421,703,433

1,174,860
10,774,874- 23 -

As ofJune 30, 2024

1,174,860
9,929,490

(2) Semi-annual statements of income(Unit: thousands of yen)
For the six months ended
June 30, 2023

Operating revenue
Real estate operating revenue
Other real estate operating revenue
Total operating revenue
Operating Expenses
Real estate operating costs
Asset management fee
Asset custody and administrative service fee
Directors’ compensation
Other operating expenses
Total operating expenses
Operating income
Non-operating income
Interest income
Gain on forfeiture of unclaimed dividends
Gain on derivative instruments
Total non-operating income
Non-operating Expenses
Interest expense
Interest expense on investment corporation bonds
Borrowing costs
Amortization of investment corporation bond issuancecosts
Amortization of investment unit issuance costs
Net derivative financial instruments loss
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Subsidy income
Total extraordinary income
Extraordinary loss
Loss on tax purpose reduction entry of non-current assets
Total extraordinary loss
Net income (loss) before income taxes
Income taxes – current
Total income taxes
Net income (loss)
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)*1 10,744,215*1 13,842,962

11,288,372

14,362,501*1 4,548,722*1 4,777,603

140
3,813
1,690
5,644

132
949
532
1,613

425,566
140,421275,366

517,765
140,600
376,919

15,344

15,383

1,785
4,040
5,744
868,269
4,897,303

8,054
－
7,112
1,065,835
7,434,327

6,570
6,570

*2 213,025*3 6,512*3 212,779

6,512
4,897,360
605
605
4,896,755
2,930
4,899,686

212,779
7,434,572
605
605
7,433,967
1,863
7,435,831*1 544,157

815,364
58,1628,700
97,495
5,528,444
5,759,928- 24 -For the six months ended
June 30, 2024

*1 519,539

916,70959,681
8,700
101,256
5,863,951
8,498,549

213,025

(3) Semi-annual statements of changes in net assets
For the six months ended June 30, 2023

(Unit: thousands of yen)
Unitholders’ equity
Surplus

Unitholders’capitalBalance, January 1,
2023
Changes of items during
the period
Reversal of reserve
for temporary
difference adjustment

Reserve fortemporarydifference
adjustment

Reserve fortax purpose
reduction
entry

21,746,398

9,976,515

1,174,860

Unappropriatedretainedearnings
Total voluntary(undisposed
reserveloss)

Total surplus

Totalunitholders’equity11,151,375

2,672,927

35,570,702

222,764,911(376,501)

376,501－－

Dividends paid

(3,046,498)(3,046,498)(3,046,498)

Net income

4,896,755

4,896,755

4,896,755

Net changes of items
other thanunitholders’ equity
Total changes of items
during the period
Balance, June 30, 2023

Balance, January 1,
2023
Changes of items during
the period
Reversal of reserve
for temporary
difference adjustment

187,194,209

Voluntary reserve
Capitalsurplus(376,501)－*1

187,194,209－(376,501)－(376,501)

2,226,758

1,850,257

1,850,257

21,746,398

9,600,013

1,174,860

10,774,874

4,899,686

37,420,959

224,615,169

Valuation and translation
adjustments
Total
Deferredvaluation andgains (losses)
translation
on hedges
adjustments
809,661

809,661

Total net
assets

223,574,572－

Dividends paid

(3,046,498)

Net income

4,896,755

Net changes of items
other thanunitholders’ equity
Total changes of items
during the period
Balance, June 30, 2023

(676,571)(676,571)(676,571)(676,571)(676,571)

1,173,685

133,089

133,089

224,748,258- 25 -

For the six months ended June 30, 2024

(Unit: thousands of yen)
Unitholders’ equity
Surplus

Unitholders’capitalBalance, January 1,
2024
Changes of items during
the period
Reversal of reserve
for temporary
difference adjustment

199,051,879

Voluntary reserve
CapitalsurplusReserve fortemporarydifference
adjustment

Reserve fortax purpose
reduction
entry

21,746,398

9,600,013

1,174,860(845,384)

Unappropriatedretainedearnings
Total voluntary(undisposed
reserveloss)
10,774,874

13,137,051

45,658,325

244,710,204(845,384)

845,384－－(13,980,573)(13,980,573)(13,980,573)

7,433,967

7,433,967

7,433,967

Dividends paid
Net income
Net changes of items
other thanunitholders’ equity
Total changes of items
during the period
Balance, June 30, 2024

Balance, January 1,
2024
Changes of items during
the period
Reversal of reserve
for temporary
difference adjustment－*1

199,051,879－(845,384)－(845,384)(5,701,220)(6,546,605)(6,546,605)

21,746,398

8,754,629

1,174,860

9,929,490

7,435,831

39,111,719

238,163,599

Valuation and translation
adjustments
Total
Deferredvaluation andgains (losses)
translation
on hedges
adjustments
270,099

270,099

244,980,303(13,980,573)

Net income

Balance, June 30, 2024

Total net
assets－Dividends paid

Net changes of items
other thanunitholders’ equity
Total changes of items
during the period

Total surplus

Totalunitholders’equity7,433,967
280,807

280,807

280,807

280,807

280,807(6,265,798)

550,906

550,906

238,714,505- 26 -

(4) Semi-annual statements of cash flows(Unit: thousands of yen)
For the six months ended
June 30, 2023

Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Loss on retirement of noncurrent assets
Loss (profit) on derivative instruments
Subsidy income
Loss on tax purpose reduction entry of non-current
assetsAmortization of investment corporation bond issuancecosts
Amortization of investment unit issuance expenses
Interest income
Interest expense(Increase) decrease in operating accounts receivable(Increase) decrease in prepaid expenses(Increase) decrease in long-term prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accrued expenses
Increase (decrease) in consumption taxes payable
Increase (decrease) in advances received
Increase (decrease) in deposits received
Other
SubtotalInterest received
Interest paid
Income taxes - refunded (paid)
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property and equipment
Purchase of property and equipment in trust
Purchase of intangible assets
Payments of reserve for repairs and maintenance
Proceeds from tenant leasehold and security deposits intrust
Reimbursements of tenant leasehold and security
deposits in trust
Subsidies received
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from short-term loans payable
Repayments of short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Dividends paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of period- 27 -For the six months ended
June 30, 2024

4,897,360
2,440,571
17,221
2,350(6,570)7,434,572
2,628,540
42,506(532)(213,025)

6,512

212,779

15,344

15,3831,785(140)565,988
1,944,516(4,716)24,233(164,539)
5,989(22,043)
54,9201,431
37,9959,818,211
140(569,069)(1,168)9,248,114

8,054
(132)
658,366
1,596,486(29,919)(120,289)(382,531)(31,878)(60,185)
6,279
(224)
(230,688)
11,533,562
132(660,577)(1,171)
10,871,945(397,764)(12,703,570)(36,517)(20,312)(1,078,057)(2,919,524)(55,014)(20,312)

197,152

49,140(55,077)(10,577)

6,570(13,009,520)

213,025(3,821,320)

15,568,000(15,611,000)
11,215,000(11,172,000)(3,044,829)(3,044,829)(6,806,235)
29,515,066*1 22,708,830

800,000(16,368,000)
30,989,000(15,421,000)(13,971,703)(13,971,703)(6,921,078)
28,515,088*1 21,594,010

(5) Notes on going concern assumption
Not applicable.
(6) Notes on matters concerning significant accounting policies(1) Property and equipment (including trust accounts)
1. Method of
Property and equipment are amortized using the straight-line method. The useful lives of major
depreciation andproperty and equipment components are as follows:amortization of
Machinery and equipment
2 to 17 years
noncurrent assets
Tools, furniture and fixtures
2 to 26 years
Buildings in trust
2 to 64 years
Structures in trust
2 to 64 years
Machinery and equipment in trust
3 to 32 years
Tools, furniture and fixtures in trust
2 to 27 years(2) Intangible assets
Intangible assets are amortized using the straight-line method. The amortization period of major
intangible assets is as follows.
Software (for internal use)
5 years as internally usable years
Trademark right
10 years
Fixed-term leasehold rights in trust are amortized using the straight-line method based on theremaining period (41 years) of the contract.
(3) Long-term prepaid expenses
Long-term prepaid expenses are amortized using the straight-line method.
2. Accounting for(1) Investment unit issuance costs
deferred assets
Investment unit issuance costs are amortized using the straight-line method over three years.
(2) Investment corporation bond issuance costs
Investment corporation bond issuance costs are amortized using the interest method over therespective term of the bond.
3. Accounting for(1) Revenue recognition
recognition of
The details of main performance obligations concerning revenue generated from contracts concluded
revenues andwith JHR’s customers and the ordinary time to fulfill such performance obligations (ordinary time
expenses
to recognize revenue) are as follows.
(a) Sale of real estate properties
For the proceeds from the sale of real estate properties, JHR recognizes revenue when thepurchaser, who is a customer, obtains control of the relevant real estate properties, etc., as aresult of the seller fulfilling its delivery obligations stipulated in the transaction agreement of
the real estate, properties, etc.
The amount obtained by deducting “Cost of sale of properties,” which is the book value of realestate, etc. sold, and “Other selling expenses,” which are the various expenses directly requiredin the sale, from “Proceeds from sale of properties,” which are the sales proceeds of real estate,etc., is indicated as “Gain on sales of real estate properties” or “Loss on sales of real estate
properties” in the statements of income. There has been no gain or loss on sales of real estate
properties in the previous and current midterm periods under review.
(b) Utilities income
For utilities income, JHR recognizes revenue in accordance with the supply of electricity, water,etc., to the lessee who is a customer based on the lease agreement of real estate, etc., andagreements incidental to it.
(2) Treatment of property taxes and other taxes
For taxes imposed on properties, etc., under management, such as property taxes, city planning taxes,
and depreciable asset taxes, the imposed amounts are allocated to the midterm period and expensed
as “Real estate operating costs.”
Cash paid for property taxes and city planning taxes, etc., to the transferor of real estate properties,
etc., at acquisition is not recorded as “Real estate operating costs” but capitalized as part of theacquisition cost of the relevant property.
The amount of such taxes capitalized in the acquisition cost of real properties, etc. was ¥26,204
thousand for the previous midterm period and was none for the current midterm period under review.

- 28 -

4. Method of hedge
accounting

5. Scope of funds (cashand cash equivalents)
in the semi-annual
statements of cashflows
6. Other significant
matters serving as thebasis for preparing
semi-annual financial
statements(1) Method of hedge accounting
Deferred hedge accounting is applied(2) Hedging instruments and hedged items
Hedging instruments
Interest rate swaps
Hedged items
Interest rates on loans payable(3) Hedging policy
JHR enters into certain derivative transactions in accordance with its financial policy in order tomanage risks, which is provided in the Articles of Incorporation.
(4) Method for assessing hedge effectiveness
JHR evaluates hedge effectiveness by comparing the cumulative changes in cash flow of hedging
instruments and the hedged items and assessing the ratio between the changes.
Cash and cash equivalents in the semi-annual statements of cash flows consist of cash on hand, cash intrust accounts, bank deposit and trust deposit, which can be withdrawn at any time, and short-term
investments with a maturity of three months or less when purchased, which can easily be converted to
cash and subject to minimal risk of change in value.
Accounting treatment of beneficial interests in trust with real estate, etc., as their assets
For trust beneficial interests in real estate, etc., under management, all assets and liabilities held in trust
accounts as well as all income generated and expenses incurred from assets in trust are presented in theaccompanying semi-annual balance sheet and income statement accounts accordingly.
The following material items of the trust accounts recorded in the relevant accounts are presented
separately on the semi-annual balance sheets.
(a) Cash and deposits in trust(b) Buildings in trust; Structures in trust; Machinery and equipment in trust; Tools, furniture andfixtures in trust; Land in trust; Construction in progress in trust(c) Leasehold rights in trust; Fixed-term leasehold rights in trust; Leasehold and security deposits
in trust(d) Tenant leasehold and security deposits in trust- 29 -

(7) Notes to semi-annual financial statements
Disclosure of notes on “securities” and “share of (profit) loss of entities accounted for using equity method” is omitted because
there is thought to be no significant need for disclosure in the midterm financial report.

[Notes to semi-annual balance sheets]*1. Accumulated advanced depreciation of property and equipment deducted from acquisition costs due to government subsidies
received, etc.
(Unit: thousands of yen)
As ofDecember 31, 2023

As ofJune 30, 2024

Buildings in trust

17,865

230,645*2. Matters concerning provision and reversal of reserve for temporary difference adjustment
As of December 31, 2023

Dividend
reserve(Note)

Amount ofinitialaccrualBalance at
beginning of
periodAmount ofprovision
during period

Amount ofreversal during
periodBalance at
end ofperiod13,127,153

9,976,515－

376,5019,600,013(Unit: thousands of yen)
Grounds for provision andreversal

Allocation for dividend(Note) Dividend reserve indicates the remaining balance of the amount subdivided into gain on negative goodwill, which wasrecorded as a dividend reserve before the fiscal year ended December 2016, and is scheduled for reversal every fiscal
year starting from the fiscal year following the fiscal year in which the reserve was made in an amount that shall be noless than that in equal amounts every fiscal year over a period of no more than 50 years.
As of June 30, 2024

Dividend
reserve(Note)(Unit: thousands of yen)Amount ofinitialaccrualBalance at
beginning of
periodAmount ofprovision
during period

Amount ofreversalduring period

Balance at
end of period

13,127,153

9,600,013－

845,384

8,754,629

Grounds for provision and reversal

Allocation for dividend(Note) Dividend reserve indicates the remaining balance of the amount subdivided into gain on negative goodwill, which wasrecorded as a dividend reserve before the fiscal year ended December 2016, and is scheduled for reversal every fiscal
year starting from the fiscal year following the fiscal year in which the reserve was made in an amount that shall be noless than that in equal amounts every fiscal year over a period of no more than 50 years.
*3. Minimum net assets as required by Article 67, Paragraph 4 of the Investment Trusts Act
As ofDecember 31, 2023
¥50,000- 30 -(Unit: thousands of yen)
As ofJune 30, 2024
¥50,000

[Notes to semi-annual statements of income]*1. Components of real estate operating revenue and real estate operating costs
For the six months ended
June 30, 2023

(Unit: thousands of yen)
For the six months ended
June 30, 2024

A. Real estate operating revenue
Real estate operating revenue
Fixed rent
Variable rent
Income from management contracts
Total
Other real estate operating revenue

7,250,068
3,008,922

7,572,442
5,544,795

485,224
10,744,215

725,723
13,842,962

61,61536,565386,351

62,381
54,763
343,20759,625544,157
11,288,372

59,186
519,539
14,362,501

422,758
980,780203,873
37,0312,440,571

429,492
1,026,452
212,748
45,173
2,628,540

17,221
7,413
410,751
20,443
7,877
4,548,722

42,506
5,613
359,756
20,692
6,627
4,777,603

6,739,649

9,584,897

Parking lots
Other incidental revenue
Utilities
Other
Total
Total real estate operating revenue
B. Real estate operating costs
Real estate operating costs
Land lease and other rent expenses
Property taxes
Outsourcing expenses (Note)
Nonlife insurance
Depreciation and amortization
Loss on retirement of noncurrent assets
Repairs
Utilities
Trust fees
Other
Total real estate operating costs
C. Net real estate operating income (A-B)(Note) Outsourcing expenses include management contract fees of ¥39,112 thousand for the six months ended June 30, 2023, and ¥52,048 thousand for the six
months ended June 30, 2024.

*2 Breakdown of subsidy income
For the six months ended June 30, 2024
Subsidy income consists of income from subsidies for regional collaborative revitalization and high value-added
development of tourist destinations and the tourism industry, as well as subsidies for CO2 emission control measures.
*3 Loss on tax purpose reduction entry of non-current assets represents the amount directly deducted from the acquisition costupon receipt of subsidies, and the breakdown is as follows.
(Unit: thousands of yen)
For the six months ended
June 30, 2023
Buildings in trust

For the six months ended
June 30, 2024
6,512

- 31 -

212,779

[Notes to semi-annual statements of changes in net assets]*1

Total number of investment units authorized, issued and outstanding
For the six months ended
June 30, 2023

For the six months ended
June 30, 2024

Total number of investment units authorized

20,000,000 units

20,000,000 units

Total number of investment units issued andoutstanding

4,467,006 units

4,637,006 units[Notes to semi-annual statements of cash flows]*1. Relation of the balance of cash and cash equivalents at the end of the period and the amount in semi-annual balance sheet
accounts(Unit: thousands of yen)
For the six months ended
For the six months ended
June 30, 2023
June 30, 2024

Cash and deposits

13,274,927

10,197,526

Cash and deposits in trust

9,433,903

11,396,483

Cash and cash equivalents

22,708,830

21,594,010[Notes on lease transactions]Operating leases (as lessor)
Minimum rental revenue under non-cancellable operating leases(Unit: thousands of yen)

As ofDecember 31, 2023

As ofJune 30, 2024

Due within one year

1,331,074

1,390,931

Due after one year

3,782,292

3,761,501

Total

5,113,366

5,152,432- 32 -

[Notes on financial instruments]
Matters concerning fair value, etc., of financial instruments.
Carrying amounts of financial instruments on the (semi-annual) balance sheets, their fair values, and the differences were as
follows. Furthermore, notes on “Cash and deposits,” “Cash and deposits in trust,” “Operating accounts receivable” and “Shortterm loans payable” are omitted as these are settled with cash and within a short period of time, and thus, the fair value
approximates the book value.
As of December 31, 2023

(Unit: thousands of yen)
Carrying amount(1) Current portion of investment corporation
bonds payable(2) Current portion of long-term loans payable

Fair value

Difference

3,000,000

2,973,700(26,300)

21,521,000

21,521,000―(3) Investment corporation bonds

33,900,000

31,371,760(2,528,240)(4) Long-term loans payable

101,242,000

101,242,000―

Total liabilities

159,663,000

157,108,460(2,554,540)

395,399395,399―(5) Derivative transactions (*)
As of June 30, 2024

(Unit: thousands of yen)
Carrying amount(1) Current portion of investment corporation
bonds payable(2) Current portion of long-term loans payable

Fair value

Difference

3,000,000

2,992,400(7,600)14,100,000

14,100,759759(3) Investment corporation bonds

33,900,000

31,539,320(2,360,680)(4) Long-term loans payable

124,231,000

124,219,105(11,894)

Total liabilities

175,231,000

172,851,584(2,379,415)(5) Derivative transactions (*)
803,773803,773―(*) Receivables and payables arising from derivative transactions are presented on a net basis and amounts in parentheses denote net
payables.
(Note)

Methods to measure fair value of financial instruments, and derivative transactions(1) Current portion of investment corporation bonds payable; (3) Investment corporation bonds
The fair value of these instruments is measured based on the market price.
(2) Current portion of long-term loans payable; (4) Long-term loans payable
For long-term loans payable with floating interest rates, the book value is recognized as the fair value because the interest
rate is periodically revised, which results in the fair value approximating the book value. For long-term loans payable with
fixed interest rates, the present value is calculated by discounting the total principal and interest at the assumed rate for similar
new borrowings.
(5) Derivative transactions
The information on the fair value of derivative transactions is presented in “Notes on derivative transactions” below.

- 33 -

[Notes on derivative transactions]1.

Derivative transactions to which hedge accounting is not applied
For derivative transactions in which hedge accounting is not applied, the contract amounts or the principal amounts equivalent
to the principal provided in the contracts. etc., as of the interim and year-end account closing dates were as follows:
As of December 31, 2023

Classification

Type, etc., ofderivative transaction

Transactions
other thanmarkettransactions

Interest rate swaps(fixed rate payment,
floating rate receipt)(Unit: thousands of yen)Contract amount, etc.
Of which, due
after one year
1,750,000

Fair value

Method to measure the fair value

The fair value is measured at the quoted(532) price, etc., obtained from the counterparty
financial institutions.

－

As of June 30, 2024
Not applicable.
2. Derivative transactions to which hedge accounting is applied
For derivative transactions in which hedge accounting is not applied, the contract amounts or the principal amounts equivalent
to the principal provided in the contracts. etc., as of the interim and year-end account closing dates were as follows:
As of December 31, 2023
Method ofType, etc., ofMain hedged
hedge
item
derivative transaction
accounting
DeferralmethodInterest rate swaps
Long-term(fixed rate payment,
loans payable
floating rate receipt)(Unit: thousands of yen)Contract amount, etc.
Of which, due
after one year
70,600,000

57,750,000

Fair value

The fair value is measured at
the quoted price, etc.,
395,932 obtained from thecounterparty financial
institutions.

As of June 30, 2024
Method ofType, etc., ofMain hedged
hedge
item
derivative transaction
accounting
DeferralmethodInterest rate swaps
Long-term(fixed rate payment,
loans payable
floating rate receipt)

Method to measure the fair
value

(Unit: thousands of yen)Contract amount, etc.
Of which, due
after one year
87,239,000- 34 -

78,939,000

Fair value

Method to measure the fairvalue

The fair value is measured at
the quoted price, etc.,
803,773 obtained from thecounterparty financial
institutions.

[Notes on asset retirement obligations]
Asset retirement obligations recognized on the balance sheet
1. Outline of the subject asset retirement obligations
JHR recognizes asset retirement obligations as it is obliged to restore the land of Oriental Hotel Fukuoka Hakata Station(former name: Hotel Centraza Hakata), acquired on April 1, 2016 to the original state in accordance with the fixed-termleasehold agreement.
2. Calculation method of the subject asset retirement obligations
Calculated the amount of asset retirement obligations by estimating the expected useful period of use of 34 years based on
the remaining useful lives of the period of buildings and using the discount rate of 0.484%.
3. Increase and decrease of the subject asset retirement obligations(Unit: thousands of yen)
For the six months ended
June 30, 2024

For the year ended
December 31, 2023
Balance at beginning of period
Adjustment due to passage of time
Balance at end of mid-term period (fiscal period)- 35 -

338,413340,051

1,637

822

340,051

340,874

[Notes on segment and related information]
1. Segment information
The segment information has been omitted because JHR has no segments other than the investment and management of hotel
real estate.
2. Related information
For the six months ended June 30, 2023
(1) Information about products and services
Information about products and services has been omitted because operating revenue from external customers in a single
product/service category accounted for more than 90% of total operating revenue on the semi-annual statements of income.
(2) Information about geographical areas(i) Operating revenue
Information about geographical areas has been omitted because operating revenue from external customers in Japanaccounted for more than 90% of total operating revenue on the semi-annual statements of income.
(ii) Property and equipment, at cost
Information about property and equipment has been omitted because the amount of property and equipment located inJapan accounted for more than 90% of net property and equipment on the semi-annual balance sheets.
(3) Information about major customers
Name of customer(Unit: thousands of yen)
Operating revenue

Hotel Management Japan Co., Ltd. (Note)(Note)

6,427,981

Name of related segment
Investment and managementof hotel real estate

Operating revenue includes the operating revenue from customers belonging to the same company group as said customers.

For the six months ended June 30, 2024
(1) Information about products and services
Information about products and services has been omitted because operating revenue from external customers in a single
product/service category accounted for more than 90% of total operating revenue on the semi-annual statements of income.
(2) Information about geographical areas(i) Operating revenue
Information about geographical areas has been omitted because operating revenue from external customers in Japanaccounted for more than 90% of total operating revenue on the semi-annual statements of income.
(ii) Property and equipment, at cost
Information about property and equipment has been omitted because the amount of property and equipment located inJapan accounted for more than 90% of net property and equipment on the semi-annual balance sheets.
(3) Information about major customers
Name of customer(Unit: thousands of yen)
Operating revenue

Hotel Management Japan Co., Ltd. (Note)(Note)

8,675,320

Name of related segment
Investment and managementof hotel real estate

Operating revenue includes the operating revenue from customers belonging to the same company group as said customers.

- 36 -

[Notes on rental properties, etc.]
JHR owns rental properties for hotels to earn lease income and income from management contracts. The carrying amounts,changes in such balances, and fair values of such properties were as follows:(Unit: thousands of yen)
For the year ended
December 31, 2023

Use

For the six months ended
June 30, 2024

Carrying amount

Hotel

Balance at beginning of period

358,478,812

392,339,582

Net increase (decrease) during period

33,860,769(437,921)

Balance at end of mid-term period (fiscal period)

392,339,582

391,901,661

525,740,000

554,880,000

Fair value at end of mid-term period (fiscal period)(Note 1) The decrease during the six months ended June 30, 2024 was principally due to depreciation. The increase for the same period was principally due toacquisition of UAN kanazawa (¥2,082,812 thousand), Sotetsu Fresa Inn Shimbashi-Karasumoriguchi (¥8,487,515 thousand), La’gent Stay Sapporo Odori(¥10,428,224 thousand), Oriental Hotel Kyoto Rokujo (¥4,620,065 thousand), Hotel Oriental Express Fukuoka Nakasukawabata (¥4,665,800 thousand)and Hotel JAL City Kannai Yokohama (¥4,046,273 thousand).
(Note 2) Fair value at end of mid-term period (fiscal period) is the appraisal value determined by licensed real estate appraisers from outside.

[Notes on revenue recognition]
For the six months ended June 30, 2023
Breakdown of information on revenue generated from contracts with customers
For the breakdown of information on revenue generated from contracts with customers, please refer to “*1. Components ofreal estate operating revenue and real estate operating costs” in [Notes to semi-annual statements of income].
“*1. Components of real estate operating revenue and real estate operating costs” include revenue based on the “AccountingStandard for Lease Transactions” (Corporate Accounting Standard No. 13). In addition, the revenue generated from contracts
with major customers is “Utilities income.”
For the six months ended June 30, 2024
Breakdown of information on revenue generated from contracts with customers
For the breakdown of information on revenue generated from contracts with customers, please refer to “*1. Components ofreal estate operating revenue and real estate operating costs” in [Notes to semi-annual statements of income].
“*1. Components of real estate operating revenue and real estate operating costs” include revenue based on the “AccountingStandard for Lease Transactions” (Corporate Accounting Standard No. 13). In addition, the revenue generated from contracts
with major customers is “Utilities income.”[Notes on per unit information]
Net assets per unit is as follows:
As of
December 31, 2023
Net assets per unit (JPY)

As of
June 30, 2024

52,831

51,480Net income per unit and the basis of computation of net income per unit for midterm are as follows:
For the six months ended
June 30, 2023
Net income (loss) per unit (JPY)For the six months ended
June 30, 2024

1,096

1,603

4,896,755

7,433,967――

Net income for midterm attributable to common investment units(JPY 1,000)

4,896,755

7,433,967

Average number of investment units during period (units)

4,467,006

4,637,006[Basis of computation]
Net income for midterm (JPY 1,000)
Amount not attributable to common unitholders (JPY 1,000)(Note)Net income per unit for midterm is computed by dividing net income for midterm by the average number of investment units during the midterm period.
Net income per unit for midterm after the adjustment of potentially dilutive units is not presented since there are no potentially dilutive units.

- 37 -

[Notes on significant subsequent events]
1. Acquisition of assets
JHR acquired the following assets on July 12, 2024 and July 31, 2024.
Name of acquired asset

MIMARU Tokyo Shinjuku West

Asset category

Real estate beneficial interest in trust and movable assets attached to the hotel

Asset type

Hotel

Adress3-11 Nishi-Shinjuku 3-chome, Shinjuku-ku, Tokyo

Acquisition dateJuly 12, 2024

SellerNot disclosed (Note 1)

Acquisition price (Note 2)¥9,645 million(Note 1) Undisclosed as consent of the tenant has not been obtained.
(Note 2) The acquisition price does not include expenses for acquisition, settlement of property tax, city planning tax, etc., and consumption tax andlocal consumption tax.

Name of acquired asset

HOTEL AMANEK Shinjuku-Kabukicho.

Asset category

Real estate beneficial interest in trust

Asset type

Hotel

Adress24-10 Kabukicho 2-chome, Shinjuku-ku, Tokyo

Acquisition dateJuly 12, 2024

SellerNot disclosed (Note 1)

Acquisition price (Note 2)¥8,845 million(Note 1) Undisclosed as consent of the tenant has not been obtained.
(Note 2) The acquisition price does not include expenses for acquisition, settlement of property tax, city planning tax, etc., and consumption tax andlocal consumption tax.

Name of acquired asset

OKINAWA HARBORVIEW HOTEL

Asset category

Real estate beneficial interest in trust and movable assets attached to the hotel

Asset type

Hotel

Adress2-46, Izumizaki, Naha city, Okinawa

Acquisition dateJuly 31, 2024

SellerNot disclosed (Note 1)

Acquisition price (Note 2)¥21,500 million(Note 1) Undisclosed as consent of the tenant has not been obtained.
(Note 2) The acquisition price does not include expenses for acquisition, settlement of property tax, city planning tax, etc., and consumption tax andlocal consumption tax.

Name of acquired asset

Southern Beach Hotel & Resort OKINAWA

Asset category

Real estate beneficial interest in trust and movable assets attached to the hotel

Asset type

Hotel

Adress1-6-1, Nishizakicho, Itoman city, Okinawa

Acquisition dateJuly 31, 2024

SellerNot disclosed (Note 1)

Acquisition price (Note 2)¥16,200 million(Note 1) Undisclosed as consent of the tenant has not been obtained.
(Note 2) The acquisition price does not include expenses for acquisition, settlement of property tax, city planning tax, etc., and consumption tax andlocal consumption tax.

- 38 -

2. New loans
JHR procured funds as follows to partially finance the acquisition of real estate beneficial interests in trust and movable
assets attached to the hotels, as described in “1. Acquisition of Assets” above.
Names ofloan

Lenders

Sumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.
Resona Bank, Limited
MUFG Bank, Ltd.
Term Loan
Sumitomo Mitsui Trust Bank,
102
LimitedDevelopment Bank of Japan Inc.
SBI Shinsei Bank, Limited
Kansai Mirai Bank, Limited
Daiwa Next Bank, Ltd
Development Bank of Japan Inc.
Term Loan Bank of the Ryukyus, Limited
103
The Nishi-Nippon City Bank,Ltd.

Term Loan
104

Sumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.
Sumitomo Mitsui Trust Bank,
LimitedResona Bank, Limited
The Bank of Fukuoka, Ltd.
The Chiba Bank, Ltd.
Kansai Mirai Bank, LimitedAozora Bank, Ltd.
The Shizuoka Bank, Ltd.

Term Loan105

MUFG Bank, Ltd.

Term Loan
106

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust Bank,
LimitedResona Bank, Limited
SBI Shinsei Bank, Limited
Daiwa Next Bank, Ltd.
Aozora Bank, Ltd.
The Minato Bank, Ltd.
Kansai Mirai Bank, Limited
The Bank of Okinawa, Ltd.

Term Loan107

MUFG Bank, Ltd.

Amount of the
new loan(JPY1M)

8,000

1,950

Interest rate
(Note)

Base interest
rate + 0.25%

Base interest
rate + 0.50%

Borrowing date

Maturity date

Collateral / methodof repayment

July 12,2024

Unsecured &Unguaranteed /September 30,
Lump-sum2025
repayment on
the maturity dateJuly 31,2024

March 30,
2029

Unsecured &Unguaranteed /Lump-sum
repayment on
the maturity date

5,850

Base interest
rate + 0.55%

July 31,2024

March 29,
2030

Unsecured &Unguaranteed /Lump-sum
repayment on
the maturity date

500

1.40380%(fixedinterest rate)

July 31,2024

March 29,
2030

Unsecured &Unguaranteed /Lump-sum
repayment on
the maturity date

March 31,
2031

Unsecured &Unguaranteed /Lump-sum
repayment on
the maturity date

March 31,
2031

Unsecured &Unguaranteed /Lump-sum
repayment on
the maturity date

12,700Base interest
rate + 0.60%

1,000

1.51536%(fixedinterest rate)

July 31,2024

July 31,2024(Note) The base interest rate to be applied to the calculation period of the interest to be paid on the interest payment date will be JBA Japanese Yen
TIBOR for one month as of two business days prior to the immediately preceding interest payment date (or, two business days prior to theborrowing date as to the first interest calculation period). However, as to Term Loan 102, JBA Japanese Yen TIBOR for three months will beapplied for the first interest calculation period and JBA Japanese Yen TIBOR for one month will be applied for all other interest calculation
periods.

- 39 -

3. Issuance of new investment units
JHR resolved to issue new investment units at the Board of Directors meetings held on June 24, 2024 and June 27, 2024,
and completed the payments on July 3, 2024 and July 30, 2024, under the following conditions.
(i)Issuance of new investment units (domestic public offering and overseas offering)Number of investment unites issued: 451,641 units
Domestic public offering: 221,641 units

Overseas offering: 230,000 units

Issue price: ¥75,558 per unit

Total issue price: ¥34,125,090,678

Paid-in amount (Issue value): ¥73,167

Total paid-in amount (Issue value): ¥33,045,217,047

Payment date

: July 3, 2024(ii) Issuance of new investment units (third-party allotment)
Number of investment unites issued: 8,359 units
Paid-in amount (Issue value): ¥73,167 per unit

Total paid-in amount (Issue value): ¥611,602,953

Payment date

: July 30, 2024

Allottee: SMBC Nikko Securities Inc.

(iii) Use of the proceeds
The proceeds of ¥33,045,217,047 from the issuance of new investment units in the domestic public offering and overseas
offering were allocated to partially fund the acquisition of MIMARU Tokyo Shinjuku West, HOTEL AMANEK ShinjukuKabukicho, OKINAWA HARBORVIEW HOTEL and Southern Beach Hotel & Resort OKINAWA as described in “1.
Acquisition of assets” above. The remainder of the proceeds from the issuance of new investment units in the domestic
public offering and overseas offering, along with ¥611,602,953 from the issuance of new investment units by way of thethird-party allotment, will be retained as cash on hand to partially fund future acquisitions of specified assets or for repairs
and capital expenditures to maintain and improve the competitiveness of existing properties.

- 40 -

(8) Changes in the total number of investment units issued and outstanding
The following is the status of increase (decrease) in the total number of investment units issued and outstanding and unitholders’capital for the past five years through to the end of the midterm period under review.
Total number of investment units
Unitholders’ capital (JPY1M)
issued and outstanding (Units)
Date
Capital transaction
Note
Increase
Increase
Balance
Balance(Decrease)(Decrease)
Capital increase throughMarch 16, 2021
third-party allotment of
4,659
4,467,006
300
187,194 (Note 1)
investment units
Capital increase throughSeptember 21, 2023
public offering of
170,000
4,637,006
11,857
199,051 (Note 2)
investment units(Note 1) New investment units were issued through third-party allotment with an issue value per unit of ¥64,400 in order to procure part of the funds for capital
expenditures.
(Note 2) New investment units were issued through public offering with an issue price per unit of ¥72,030 (issue value of ¥69,751) in order to procure funds forthe acquisition of new properties, etc.

- 41 -

3. Reference information
For detailed information on each property and the operating result of hotels, please see the reference information below as well as the
Financial Results Briefing dated today and the website of JHR (https://www.jhrth.co.jp/en/ir/library.html).

(1) Information on values of assets under management, etc.

A. Investment status
The following outlines the investment status of JHR as of the end of the midterm period under review.

Assetcategory

Hotel type
(Note 1)

Prefectural
location

Osaka

Tokyo

Limitedservice hotel

Hokkaido

FukuokaRealestate in
trust

Kyoto

Name

As of
June 30, 2024
Total amount
Ratio toheld
total assets(JPY1M)(%)(Note 2)
(Note 3)

Holiday Inn Osaka Namba

26,566

6.2

26,518

6.3

Namba Oriental Hotel

14,217

3.3

14,168

3.4

Hotel Oriental Express Osaka Shinsaibashi

2,769

0.6

2,763

0.7

Sotetsu Fresa Inn Shimbashi-Karasumoriguchi

8,469

2.0

8,461

2.0

the b Ikebukuro

6,599

1.5

6,589

1.6

CANDEO HOTELS Ueno Koen

6,525

1.5

6,504

1.5

Comfort Hotel Tokyo Higashi Nihombashi

3,394

0.8

3,382

0.8

the b hachioji

2,691

0.6

2,675

0.6

Smile Hotel Nihombashi Mitsukoshimae

2,025

0.5

2,017

0.5

R&B Hotel Ueno-hirokoji

1,804

0.4

1,798

0.4

Chisun Hotel Kamata

1,452

0.3

1,438

0.3

the b suidobashi

1,140

0.3

1,133

0.3

dormy inn EXPRESS Asakusa

917

0.2

914

0.2

Chisun Inn Kamata

778

0.2

772

0.2

La’gent Stay Sapporo Odori

10,402

2.4

10,384

2.5

ibis Styles Sapporo

6,299

1.5

6,265

1.5

Mercure Sapporo

5,563

1.3

5,534

1.3

Hotel Oriental Express Fukuoka Tenjin

5,710

1.3

5,685

1.3

Hotel Oriental Express Fukuoka Nakasukawabata

4,621

1.1

4,609

1.1

the b hakata

2,319

0.5

2,310

0.5

Washington Hotel Plaza Hakata, Nakasu

2,065

0.5

2,072

0.5

Toyoko Inn Hakata-guchi Ekimae

1,346

0.3

1,337

0.3

ibis Styles Kyoto Station

6,556

1.5

6,542

1.6

Oriental Hotel Kyoto Rokujo

4,570

1.1

4,556

1.1

Kanazawa

Hotel JAL City Kannai Yokohama

4,027

0.9

4,022

1.0

Okinawa

Mercure Okinawa Naha

2,713

0.6

2,687

0.6

Kumamoto

dormy inn Kumamoto

2,205

0.5

2,185

0.5

Ishikawa

UAN kanazawa

2,056

0.5

2,046

0.5

Washington Hotel Plaza Nara

1,716

0.4

1,698

0.4

Subtotal

141,52732.9

141,076

33.5

Hilton Tokyo Odaiba

63,167

14.7

63,05415.0

Oriental Hotel Tokyo Bay

16,932

3.9

16,820

4.0

Hilton Tokyo Narita Airport

13,0033.0

12,918

3.1

International Garden Hotel Narita

8,916

2.1

8,839

2.1

Hotel Francs

3,172

0.7

3,169

0.8

ACTIVE-INTER CITY HIROSHIMA(Sheraton Grand Hiroshima Hotel) (Note 4)

16,8483.9

16,808

4.0

Nara
Tokyo

Chiba

Full-service
hotel

As of
December 31, 2023
Total amount
Ratio toheld
total assets(JPY1M)(%)(Note 2)
(Note 3)Hiroshima

Oriental Hotel Hiroshima

4,005

0.9

3,975

0.9

Aichi

Hilton Nagoya

15,527

3.6

15,455

3.7

Nara

Hotel Nikko Nara

9,998

2.3

9,963

2.4

Hyogo

Kobe Meriken Park Oriental Hotel

9,443

2.2

9,357

2.2

FukuokaOriental Hotel Fukuoka Hakata Station

8,395

2.0

8,231

2.0

Kanagawa

Mercure Yokosuka

1,642

0.4

1,632

0.4

Subtotal

171,05439.8

170,225

40.4- 42 -

Assetcategory

Hotel type
(Note 1)

Prefectural
locationName

17,336

4.1

15,626

3.6

16,198

3.8

6,413

1.5

6,399

1.5

Hilton Tokyo Bay

25,993

6.0

25,913

6.1

Oriental Hotel Universal City

7,192

1.7

7,152

1.7

Hakone Setsugetsuka

3,528

0.8

3,484

0.8

17,441

Oriental Hotel Okinawa Resort & Spa
The Beach Tower Okinawa

Chiba
Osaka
Kanagawa

Subtotal
Real estate in trust – Total

76,19517.7

76,485

18.1

388,777

90.4

387,787

92.0

Deposits and other assets (Note 5)

41,177

9.6

33,916

8.0

Total assets

429,955

100.0

421,703

100.0

Amount(JPY1M)(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)As ofJune 30, 2024
Total amount
Ratio toheld
total assets(JPY1M)(%)(Note 2)
(Note 3)

4.1

Hotel Nikko Alivila
Okinawa
Resort hotel

As ofDecember 31, 2023
Total amount
Ratio toheld
total assets(JPY1M)(%)(Note 2)
(Note 3)

Ratio tototal assets(%)

Amount(JPY1M)

Ratio tototal assets(%)

Total liabilities

184,975

43.0

182,988

43.4

Total net assets

244,98057.0

238,714

56.6

Hotels are categorized as limited-service hotels, full-service hotels or resort hotels according to the manner of operation.
For real estate in trust, “Total amount held” shows the amount calculated by deducting accumulated depreciation from the acquisition price (including
expenses incidental to acquisition).
“Ratio to total assets” shows the ratio of the total amount of each asset held to total assets, rounded off to one decimal place.
ACTIVE-INTER CITY HIROSHIMA is classified in accordance with the business category of Sheraton Grand Hiroshima Hotel, its main facility.
Includes machinery and equipment, tools, furniture and fixtures, construction in progress, construction in progress in trust, and intangible assets(excluding leasehold rights in trust and fixed-term land lease rights in trust).

- 43 -

B. Assets under management(A) Major issues of investment securities
Not applicable.
(B) Real estate properties under management
Not applicable.
(C) Other major assets under management(i) Summary of real estate properties (in trust) under management
The following summarizes the real estate properties (in trust) under management by JHR as of the end of the midterm period
under review.
a. Details of assets under management (acquisition price, etc.)
Property
No.

Name

Grade
(Note 1)

1

Kobe Meriken Park Oriental Hotel

Upper-middle

2

Oriental Hotel Tokyo Bay

3

Namba Oriental Hotel

4

Hotel Nikko Alivila

58Investment
Appraisal
Acquisition Carrying amountratio
value at end of Appraisal
price
at end of period(Acquisition
periodagency(JPY1M)(JPY1M)
price)(JPY1M)(Note 5)(Note 2)
(Note 3)(%)(Note 4)(Note 6)

Collateral(Note 7)

10,9009,648

14,700N

2.7

Unsecured

Upper-middle

19,90017,45934,600N

5.0

UnsecuredMid-price

15,00014,22432,300N

3.8

Unsecured

Luxury18,90017,565

29,100N

4.8

Unsecured

Oriental Hotel Hiroshima

Upper-middle

4,100

4,018

4,330

N

1.0

Unsecured

The Beach Tower Okinawa

Mid-price

7,610

6,402

10,200N

1.9

Unsecured

9

Hakone Setsugetsuka

Mid-price

4,070

3,490

5,580

N

1.0

Unsecured

10

dormy inn Kumamoto

Mid-price

2,334

2,185

3,650

N

0.6

Unsecured

12

the b suidobashi

Mid-price

1,120

1,141

2,490

N

0.3

Unsecured13

dormy inn EXPRESS Asakusa

Economy

999

915

1,350

J

0.3

Unsecured

14

Washington Hotel Plaza Hakata, Nakasu

Mid-price

2,130

2,072

4,610

N

0.5

Unsecured

15

Washington Hotel Plaza Nara

Mid-price

2,050

1,698

2,460

N

0.5

Unsecured16

R&B Hotel Ueno-hirokoji

Economy

1,720

1,798

1,880

J

0.4

Unsecured

18

Comfort Hotel Tokyo Higashi Nihombashi

Economy

3,746

3,383

5,730

J

0.9

Unsecured

22

Smile Hotel Nihombashi Mitsukoshimae

Economy

2,108

2,017

3,070

J

0.5

Unsecured24

Toyoko Inn Hakata-guchi Ekimae

Economy

1,652

1,337

2,770

T

0.4

Unsecured

25

Chisun Hotel Kamata

Economy

1,512

1,451

2,090

T

0.4

Unsecured

26

Chisun Inn Kamata

29

Oriental Hotel Universal City

31

Economy

823

776

1,440

T

0.2

Unsecured

Upper-middle

6,753

7,363

22,300R

1.7

Unsecured

Hilton Tokyo Bay

Luxury26,05025,91942,700D

6.6

Unsecured32

ibis Styles Kyoto Station

Mid-price

6,600

6,550

10,000D

1.7

Unsecured33

ibis Styles Sapporo

Mid-price

6,797

6,312

11,600N

1.7

Unsecured34

Mercure Sapporo

Mid-price

6,000

5,591

12,400N

1.5

Unsecured35

Mercure Okinawa Naha

Mid-price

3,000

2,733

7,370

N

0.8

Unsecured37

the b ikebukuro

Mid-price

6,520

6,598

7,590

N

1.6

Unsecured39

the b hachioji

Mid-price

2,610

2,689

2,720

N

0.7

Unsecured40

the b hakata

Mid-price

2,300

2,318

4,760

N

0.6

Unsecured

41

Hotel Francs

Mid-price

3,105

3,171

4,660

D

0.8

Unsecured42

Mercure Yokosuka

Upper-middle

1,650

1,659

3,550

D

0.4

Unsecured

43

Oriental Hotel Okinawa Resort & Spa

Upper-middle

14,95017,06819,500N

3.8

Unsecured

44

ACTIVE-INTER CITY HIROSHIMA(Sheraton Grand Hiroshima Hotel)

Luxury17,32017,051

20,500D

4.4

Unsecured

45

CANDEO HOTELS Ueno Koen

Unsecured

46

Oriental Hotel Fukuoka Hakata Station

47

Mid-price

6,705

6,515

7,620

D

1.7

Upper-middle

7,197

8,332

15,500D

1.8

Unsecured

Holiday Inn Osaka Namba

Mid-price

27,00026,551

27,300N

6.8

Unsecured

48

Hotel Oriental Express Fukuoka Tenjin

Mid-price

5,248

5,733

7,470

D

1.3

Unsecured

49

Hilton Nagoya

Luxury15,25015,455

15,500D

3.8

Unsecured

50

Hilton Tokyo Narita Airport

Upper-middle

13,175

13,15013,200N

3.3

Unsecured

51

International Garden Hotel Narita

Mid-price

9,125

8,924

9,620

N

2.3

Unsecured- 44 -

Property
No.

Grade
(Note 1)Name

52

Hotel Nikko Nara

53

Hotel Oriental Express Osaka Shinsaibashi

54
55

Investment
Appraisal
Acquisition Carrying amountratio
value at end of Appraisal
price
at end of period(Acquisition
periodagency(JPY1M)(JPY1M)
price)(JPY1M)(Note 5)(Note 2)
(Note 3)(%)(Note 4)(Note 6)

Collateral(Note 7)Upper-middle

10,373

10,056

9,810

D

2.6

UnsecuredMid-price

2,738

2,781

2,900

D

0.7

Unsecured

Hilton Tokyo Odaiba

Upper-middle

62,40063,246

72,700N

15.7

Unsecured

UAN kanazawa

Upper-middle

2,050

2,052

2,340

N

0.5

Unsecured

56

Sotetsu Fresa Inn
Shimbashi-Karasumoriguchi

Mid-price

8,400

8,461

10,100D

2.1

Unsecured57

La’gent Stay Sapporo Odori

Mid-price

10,02010,403

11,500N

2.5

Unsecured

58

Oriental Hotel Kyoto Rokujo

Mid-price

4,446

4,608

6,470

N

1.1

Unsecured

59

Hotel Oriental Express
Fukuoka Nakasukawabata

Mid-price

4,460

4,643

6,280

N

1.1

Unsecured

60

Hotel JAL City Kannai Yokohama

Mid-price

4,000

4,042

4,570

N

1.0

Unsecured(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)(Note 8)

Total
396,918
391,574
554,880
100.0
JHR categorizes hotels into the four grade classes of “Luxury,” “Upper-middle,” “Mid-price” and “Economy” mainly from the perspective of average
daily rate, etc.
“Acquisition price” is the acquisition price stated on the purchase and sale agreement for beneficial interest in trust, etc. (consumption tax, local
consumption tax and the acquisition expense such as broker’s fee are not included). The acceptance prices are indicated for the properties that havebeen accepted through the Merger.
“Carrying amount at end of period” is the book value at the end of the midterm period under review and includes not only the amounts for real estatein trust, but also for machinery and equipment, tools, furniture and fixtures, construction in progress, construction in progress in trust and intangible
assets.
“Appraisal value at end of period” is the appraisal value at the end of the midterm period under review as the date of appraisal, in accordance with theasset valuation methods and standards provided in JHR’s Articles of Incorporation and the regulations set forth by The Investment Trusts Association,
Japan.
Under “Appraisal agency,” the letters indicate the appraisers for the properties as follows:
N: Nihon Fudosan Kenkyusho (Japan Real Estate Institute)
J: JLL Morii Valuation & Advisory K.K.
T: The Tanizawa Sogo Appraisal Co., Ltd.
R: Rich Appraisal Institute Co., Ltd.
D: DAIWA REAL ESTATE APPRAISAL CO., LTD.
“Investment ratio” is the ratio of acquisition price of the respective asset held at the end of the midterm period under review to the total amount ofacquisition price of all assets held at the end of the midterm period under review, rounded off to one decimal place.
“Collateral” is whether or not a pledge has been established for the beneficial interest in trust.
The omitted property numbers are the property numbers of assets that have been transferred.

b. Details of assets under management (change in tenants of portfolio)
The following is the total number of tenants, total leasable area, total leased area and occupancy rate of real estate properties(in trust) under management for the past five years.

Total number of tenants(Note 1)

End of20th period
December 2019

End of21st period
December 2020

End of22nd period
December 2021

End of23rd period
December 2022

End of24th period
December 2023

End of midterm of
25th period
June 2024

125

121

116

110

117

119

Total leasable area
746,329.68m2
741,083.02m2
733,995.61m2
733,995.61m2
767,700.44m2
767,700.44m2(Note 2)
Total leased area
745,227.67m2
740,146.96m2
732,764.69m2
732,251.49m2
765,875.99m2
766,256.79m2(Note 3)
Occupancy rate
99.9%
99.9%
99.8%
99.8%
99.8%
99.8%
(Note 4)(Note 1) Total number of tenants indicates the total number of tenants based on the lease contracts for respective real estate in trust (excluding tenants of parking
lots, etc.) as of the end of each fiscal period or midterm period. However, for properties for which master lease contracts under the pass-through scheme
are concluded in which the trustee receives the same amounts of rents, etc. from end tenants as is in principle, the total number of end tenants (excluding
tenants of parking lots, etc.) is indicated.
(Note 2) In principle, total leasable area represents leasable area of the building, which does not include leasable area of land (including parking lots on ground),based on a lease contract or plan for each real estate in trust. For properties in which the leased area is not described in the lease contract, leasable area
represents the area described in the registration of the building. Furthermore, when the leasable area in the lease contract is indicated in tsubo units, thefigure in the table has been converted to the area in metric units (3.30578m2 per one tsubo). The same shall apply hereinafter.
(Note 3) In principle, total leased area represents the leased area described in the lease contract of the building. For properties in which the leased area is notdescribed in the lease contract, leased area shows the area described in the registration of the building. Furthermore, when the leased area in the lease
contract is indicated in tsubo units, the figure in the table has been converted to the area in metric units (3.30578m2 per one tsubo). However, forproperties for which master lease contracts under the pass-through scheme are concluded in which the trustee receives the same amounts of rents, etc.
from end tenants as is in principle, the total area for which lease contracts have been concluded with end tenants and which are actually leased isindicated. The same shall apply hereinafter.
(Note 4) Occupancy rate indicates the percentage of leased area of leasable area of respective real estate properties in trust as of the end of each fiscal period or
midterm period. The same shall apply hereinafter.

- 45 -

c. Details of assets under management (information on major real estate)
There is no major real estate of which total annual rent accounts for 10% or more of the total annual rent of the entire
portfolio.
“Total annual rent” refers to the total amount calculated by multiplying the monthly fixed rent (rent of the building itself
only, excluding common area maintenance charges and signage and parking usage fees without factoring in any change inrent during the fiscal year) in lease contracts at the end of the midterm period under review is multiplied by 12, adding
assumed amounts of revenue sharing, variable rent and income from management contracts for the full fiscal year.
d. Details of assets under management (NOI, etc.)
Property
No.
1
2
3
4
5
8
9
10
12
13
14
15
16
18
22
24
25
26
29
31
32
33
34
35
37
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
(Note 1)
(Note 2)
(Note 3)(Note 4)

Name
Kobe Meriken Park Oriental Hotel
Oriental Hotel Tokyo Bay
Namba Oriental Hotel
Hotel Nikko Alivila
Oriental Hotel Hiroshima
The Beach Tower Okinawa
Hakone Setsugetsuka
dormy inn Kumamoto
the b suidobashi
dormy inn EXPRESS Asakusa
Washington Hotel Plaza Hakata, Nakasu (Note 4)
Washington Hotel Plaza Nara (Note 4)
R&B Hotel Ueno-hirokoji
Comfort Hotel Tokyo Higashi Nihombashi
Smile Hotel Nihombashi Mitsukoshimae
Toyoko Inn Hakata-guchi Ekimae
Chisun Hotel Kamata
Chisun Inn Kamata
Oriental Hotel Universal City
Hilton Tokyo Bay
ibis Styles Kyoto Station
ibis Styles Sapporo
Mercure Sapporo
Mercure Okinawa Naha
the b ikebukuro
the b hachioji
the b hakata
Hotel Francs
Mercure Yokosuka
Oriental Hotel Okinawa Resort & Spa
ACTIVE-INTER CITY HIROSHIMA(Sheraton Grand Hiroshima Hotel)
CANDEO HOTELS Ueno Koen
Oriental Hotel Fukuoka Hakata Station
Holiday Inn Osaka Namba
Hotel Oriental Express Fukuoka Tenjin
Hilton Nagoya
Hilton Tokyo Narita Airport
International Garden Hotel Narita
Hotel Nikko Nara
Hotel Oriental Express Osaka Shinsaibashi
Hilton Tokyo Odaiba
UAN kanazawa
Sotetsu Fresa Inn Shimbashi-Karasumoriguchi
La’gent Stay Sapporo Odori
Oriental Hotel Kyoto Rokujo
Hotel Oriental Express Fukuoka Nakasukawabata
Hotel JAL City Kannai Yokohama
Total

Real estate
operating revenue(JPY 1,000)
415,454
1,042,577
667,836438,278
79,716
255,504
147,469
109,51377,75932,537
120,000
75,00048,645
174,512
98,58770,51975,63344,785
791,903
990,117200,116
218,474
318,873
129,069
183,41499,434130,616150,000
173,064
274,999

NOI(Note 2)(JPY 1,000)
292,292
980,213610,222358,264
57,371
233,255
134,860
98,05872,31627,898112,000
67,00040,814
158,380
89,98863,19068,362
41,214
762,139
847,549
178,408
169,714220,193
101,336
167,21087,448
123,689
119,181
117,185
231,606

NOI after depreciation(Note 3)
(JPY 1,000)
135,183
790,117551,350
224,031
18,220174,841
86,29069,99860,01921,461
99,00048,00031,030139,265
79,232
54,275
49,10935,016645,254
750,460
161,868
128,406
174,61364,486
151,398
67,077
112,644
91,452
97,375(41,536)

Variable/Fixed

769,528

523,021402,268

Fixed
Variable/Fixed
Variable/Fixed
Variable/Fixed
Variable
Variable/Fixed
Variable/Fixed
Variable/Fixed
Variable/Fixed
Variable/Fixed
Variable/Fixed (Note 5)
Variable/Fixed (Note 5)
Variable
Variable/Fixed
Variable/Fixed
Variable/Fixed

174,985
917,380
578,140
365,315
657,560
314,559
251,743
237,402112,963
1,338,676
57,003
263,358
253,614
159,339
174,60367,50014,328,996

161,479
794,438
552,408
312,720
343,113275,838
230,105
213,546
105,650
1,163,927
53,510236,496
241,921
153,217
168,066
61,63912,223,263

139,073
599,012491,270
277,259
244,841
161,947
145,801
137,402
97,091
1,003,091
43,379225,236
204,973
134,999
154,778
46,322
9,579,437

Rent type(Note 1)
Variable/Fixed
Variable/Fixed
Variable/Fixed
Variable/Fixed
Variable/Fixed
Fixed
Fixed
Variable/Fixed
Variable/Fixed
Fixed
Fixed
Fixed
Fixed
Variable/Fixed (Note 5)
Variable/Fixed (Note 5)
Fixed
Variable
Variable
Variable/Fixed
Variable/Fixed (Note 5)
Management contract
Management contract
Management contract
Management contract
Variable/Fixed
Variable/Fixed
Variable/Fixed
Fixed (Note 6)
Variable
Variable/Fixed

Under “Rent type,” “Fixed” is a property under a fixed rent structure, “Variable” is a property under a variable rent structure, “Management contract”
is a property under a management contract structure, and “Variable/Fixed” is a property under a combination of fixed and variable rent structures.
NOI = Real estate operating revenue – Real estate operating costs + Depreciation + Loss on retirement of noncurrent assets + Asset retirement
obligations expenses
NOI after depreciation (net real estate operating income) = Real estate operating revenue – Real estate operating costs
For Washington Hotel Plaza Hakata, Nakasu and Washington Hotel Plaza Nara, consent on disclosure of rent in units of thousands of yen has not been

- 46 -

(Note 5)(Note 6)(Note 7)

obtained from the lessees and numbers are thus rounded down to the nearest millions of yen.
Comfort Hotel Tokyo Higashi Nihombashi, Smile Hotel Nihombashi Mitsukoshimae, Hilton Tokyo Bay, UAN kanazawa and Sotetsu Fresa Inn
Shimbashi-Karasumoriguchi have rent structures with fixed rents and partial revenue sharing.
For Hotel Francs, the rent type will change to Variable/Fixed from October 31, 2024 onward.
The property numbers of assets that were sold before the end of the previous fiscal year are intentionally omitted.

e. Summary of analyses, etc. of earthquake risk
The following is the PML value, etc., of real estate properties (in trust) under management as of the end of the midterm
period under review.
PropertyNo.

Name

Probable Maximum
Loss (PML) ratio by
earthquake risk
analyses (%) (Note 1)

Existence of earthquake
insurance

Provider of
PML value(Note 2)

1

Kobe Meriken Park Oriental Hotel

11.6

None

P

2

Oriental Hotel Tokyo Bay

14.2

None

P

3

Namba Oriental Hotel

13.4

None

P

4

Hotel Nikko Alivila

7.3

None

P

5

Oriental Hotel Hiroshima

10.7

None

O

8

The Beach Tower Okinawa

2.7

None

S

9

Hakone Setsugetsuka

14.4

None

P

10

dormy inn Kumamoto

5.6

None

S

12

the b suidobashi

5.4

None

S

13

dormy inn EXPRESS Asakusa

4.9

None

S

14

Washington Hotel Plaza Hakata, Nakasu

8.2

None

P

15

Washington Hotel Plaza Nara

13.7

None

P

16

R&B Hotel Ueno-hirokoji

3.6

None

S

18

Comfort Hotel Tokyo Higashi Nihombashi

6.7

None

S

22

Smile Hotel Nihombashi Mitsukoshimae24

Toyoko Inn Hakata-guchi Ekimae

25

7.5

None

S

Total: 3.8

None

S

Chisun Hotel Kamata

9.0

None

S

26

Chisun Inn Kamata

4.2

None

S

29

Oriental Hotel Universal City

8.7

None

P

31

Hilton Tokyo Bay

3.2

None

T

32

ibis Styles Kyoto Station

10.5

None

T

33

ibis Styles Sapporo

1.0

None

T

34

Mercure Sapporo

1.0

None

T

35

Mercure Okinawa Naha

0.5

None

T

37

the b ikebukuro

5.3

None

T

39

the b hachioji

4.9

None

T

40

the b hakata

3.3

None

T

41

Hotel Francs

2.5

None

T

42

Mercure Yokosuka

7.1

None

T

43

Oriental Hotel Okinawa Resort & Spa

0.7

None

T

44

ACTIVE-INTER CITY HIROSHIMA(Sheraton Grand Hiroshima Hotel)

2.0

None

T

45

CANDEO HOTELS Ueno Koen

3.1

None

T

46

Oriental Hotel Fukuoka Hakata Station

2.4

None

T

47

Holiday Inn Osaka Namba

6.5

None

T

48

Hotel Oriental Express Fukuoka Tenjin

3.3

None

T

49

Hilton Nagoya

1.7

None

T

50

Hilton Tokyo Narita Airport

2.4

None

T

51

International Garden Hotel Narita

5.2

None

T

52

Hotel Nikko Nara

7.5

None

T

- 47 -

Property
No.

(Note 1)

(Note 2)

(Note 3)

Name

Probable Maximum
Loss (PML) ratio by
earthquake risk
analyses (%) (Note 1)
7.3

Existence of earthquake
insurance

Provider of
PML value(Note 2)

None

S

53

Hotel Oriental Express Osaka Shinsaibashi

54

Hilton Tokyo Odaiba

4.3

None

T

55

UAN kanazawa

10.0

None

T

56

Sotetsu Fresa Inn Shimbashi-Karasumoriguchi

7.0

None

S

57

La’gent Stay Sapporo Odori

2.6

None

T

58

Oriental Hotel Kyoto Rokujo

12.2

None

T

59

Hotel Oriental Express Fukuoka Nakasukawabata

5.2

None

T

60

Hotel JAL City Kannai Yokohama

7.9

None

S

PML (Probable Maximum Loss) represents damage caused by a major earthquake that may occur once every 475 years (estimated probability of such
earthquake to occur during the 50 years is 10%.) during expected holding period (50 years = useful life of ordinary buildings). PML is the anticipatedpercentage of recovery cost against the building replacement cost. JHR will evaluate the possibility to acquire earthquake insurance for the property if
the PML of the particular property exceeds 15%. As of the end of the midterm fiscal period under review, there is no property with a plan to be insured
by earthquake insurance.
Under “Provider of PML value,” the letters indicate the provider as follows.
T: Tokio Marine dR Co., Ltd.
P: Deloitte Tohmatsu Property Risk Solution Co., Ltd.
O: OBAYASHI CORPORATION
S: SOMPO Risk Management, Inc.
The property numbers of assets sold are intentionally omitted.

- 48 -

(ii) Income statements for individual real estate properties (in trust) under management
The following table shows income and expenditures for individual investment real estate properties (trust) for the current
midterm period until June 30, 2024. Figures are rounded down to the nearest thousands of yen in principle but are otherwise
noted if circumstances do not allow for the figures to be stated in units of thousands of yen.
Property No.

-

1

2

3

4

5

Property name

Portfolio total(Note 1)

Kobe
Meriken Park
Oriental Hotel

Oriental HotelTokyo Bay

Namba
Oriental Hotel

Hotel Nikko
AlivilaOriental Hotel
Hiroshima

Number of operating days

-

182

182

182

182

182

(A) Real estate operating revenue subtotal

14,328,996

415,454

1,042,577

667,836438,278

79,716

Fixed rent

7,572,442

299,950

379,300

421,950

402,049

107,251

Variable rent

6,270,519

114,534

663,277

245,886

36,228(27,535)

Other revenue

486,034

969

-

-

-

-

(B) Real estate operating costs subtotal

4,749,559

280,270

252,460

116,486

214,246

61,495Land lease and other rent expenses

429,492

96,354--

48,801-

Property taxes

1,026,452

23,11858,711

55,57327,331

20,645

Outsourcing expenses

212,748

480

480

480

960

480

Nonlife insurance

45,173

2,391

2,716

1,104

2,006

713

Depreciation and amortization

2,600,495

157,092

185,555

58,871

126,193

39,150Loss on retirement of noncurrent assets

42,506

16

4,541

-

8,039

-

Other costs

392,690

816

456

456

914

505

(C) Net real estate operating income = (A) − (B)9,579,437

135,183

790,117551,350

224,031

18,220(Reference) Occupancy rate

99.8%

100.0%

100.0%

100.0%

100.0%

100.0%(Reference) Number of tenants

119

1

1

1

1

1

Property No.

8

9

10

12

13

14

Property name

The Beach Tower
Okinawa

HakoneSetsugetsuka

dormy inn
Kumamoto

the bsuidobashi

dormy inn
EXPRESSAsakusa

Washington
Hotel Plaza
Hakata, Nakasu(Note 2)

Number of operating days

182

182

182

182

182

182

(A) Real estate operating revenue subtotal

255,504

147,469

109,51377,75932,537

120,000

Fixed rent

255,504

147,169

97,23015,00031,697

120,000

Variable rent--

12,28362,759--Other revenue

-

300

-

-

840

0

(B) Real estate operating costs subtotal

80,662

61,17939,515

17,73911,07620,000Land lease and other rent expenses

-

-

-

-

-

-

Property taxes

20,626

11,67010,491

4,208

3,271

6,000

Outsourcing expenses

-

-

-

600

600

0

Nonlife insurance

1,101

533

381

145

88

0

Depreciation and amortization

58,41348,56928,06012,296

6,437

12,000Loss on retirement of noncurrent assets

-

-

-

-

-

-

Other costs

520

405

583

489

679

0

(C) Net real estate operating income = (A) − (B)174,841

86,29069,99860,01921,461

99,000(Reference) Occupancy rate

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%(Reference) Number of tenants

1

1

1

1

1

1

- 49 -

Property No.

15

16

18

22

24

25

Property name

Washington Hotel
Plaza Nara
(Note 2)

R&B Hotel
Ueno-hirokoji

Comfort HotelTokyo Higashi
Nihombashi

Smile Hotel
Nihombashi
Mitsukoshimae

Toyoko Inn
Hakata-guchi
EkimaeChisun Hotel
KamataNumber of operating days

182

182

182

182

182

182

(A) Real estate operating revenue subtotal

75,00048,645

174,512

98,58770,51975,633Fixed rent

73,00048,252130,160

67,20070,519-Variable rent--

38,74831,387-75,633

Other revenue

1,000

393

5,602

-

-

-

(B) Real estate operating costs subtotal

27,00017,61535,246

19,355

16,244

26,524

Land lease and other rent expenses

-

-

-

-

-

-

Property taxes

5,000

6,753

14,498

7,235

6,064

6,078

Outsourcing expenses

1,000

420

807

600

540

600

Nonlife insurance

0

138

304

145

205

173

Depreciation and amortization

18,0009,784

19,115

10,755

8,915

19,252

Loss on retirement of noncurrent assets

0

-

-

-

-

-

Other costs

0

518

521

618

518

419

(C) Net real estate operating income = (A) − (B)48,00031,030139,265

79,232

54,275

49,109(Reference) Occupancy rate

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%(Reference) Number of tenants

2

1

2

1

1

1

Property No.

26

29

31

32

33

34

Property name

Chisun Inn
KamataOriental Hotel
Universal City

HiltonTokyo Bay

ibis Styles
Kyoto Station(Note 1)

ibis Styles
Sapporo(Note 1)

MercureSapporo(Note 1)

Number of operating days

182

182

(A) Real estate operating revenue subtotal

44,785

791,903

Fixed rent-

158,333

Variable rent

44,785616,331

Other revenue-

17,239(B) Real estate operating costs subtotal

9,768

146,648

182

182

182

182

990,117200,116

218,474

318,873

Undisclosed(Note 3)
Undisclosed(Note 3)
Undisclosed(Note 3)22,967

13,74636,475

176,955

184,551

235,170

193

20,17547,227

239,656

38,24790,068144,260

Land lease and other rent expenses--

61,860---Property taxes

2,538

25,50169,801

12,374

19,32925,988Outsourcing expenses

540

1,155

6,916

8,650

10,46730,604

Nonlife insurance

72

1,663

3,182

264

697

750

Depreciation and amortization

6,197

116,879

97,08916,54041,30845,579Loss on retirement of noncurrent assets

-

5

-

-

-

-

Other costs

419

1,444

806

418

18,26541,335(C) Net real estate operating income = (A) − (B)35,016645,254

750,460

161,868

128,406

174,613(Reference) Occupancy rate

100.0%

100.0%

100.0%

100.0%

99.4%

99.1%

(Reference) Number of tenants

1

1

1

2

5

9

- 50 -

Property No.

35

37

39

40

41

42

Property nameMercureOkinawa Naha
(Note 1)the bikebukuro

the bhachioji

the bhakataHotel Francs

MercureYokosuka

Number of operating days

182

182

182

182

182

182

(A) Real estate operating revenue subtotal

129,069

183,41499,434130,616150,000

173,064

Fixed rent-

65,591

29,12633,261150,000-

Variable rent

129,045

116,754

68,44597,355-

148,547

Other revenue

23

1,068

1,861

-

-

24,517(B) Real estate operating costs subtotal

64,58232,01532,356

17,97258,54775,688Land lease and other rent expenses

172

-

-

-

-

-

Property taxes

11,95012,407

10,574

5,540

27,87015,976

Outsourcing expenses

14,031

3,034

600

600

900

10,762

Nonlife insurance

618

333

386

216

803

1,091

Depreciation and amortization

36,85015,812

20,371

11,04527,72819,809Loss on retirement of noncurrent assets

-

-

-

-

-

-

Other costs

958

427

425

570

1,245

28,047(C) Net real estate operating income = (A) − (B)64,486

151,398

67,077

112,644

91,452

97,375(Reference) Occupancy rate

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%(Reference) Number of tenants

1

4

9

2

1

1

Property No.

43

44

45

46

47

48

Property name

Oriental Hotel
Okinawa
Resort & Spa

ACTIVE-INTERCITY
HIROSHIMACANDEOHOTELS
Ueno Koen

Oriental Hotel
Fukuoka Hakata
StationHoliday Inn
Osaka Namba

Hotel Oriental
Express Fukuoka
TenjinNumber of operating days

182

182

182

182

182

182

(A) Real estate operating revenue subtotal

274,999

769,528

174,985

917,380

578,140

365,315

Undisclosed(Note 3)

212,499

288,000

92,807

Fixed rent

274,999

420,842

Variable rent-

201,660-

704,880

290,140

241,998--

30,509Other revenue-

147,025

Undisclosed(Note 3)(B) Real estate operating costs subtotal

316,536

367,260

35,911

318,368

86,86988,055Land lease and other rent expenses

-

-

-

111,103--

Property taxes

39,81664,452

11,952

8,912

23,712

18,145

Outsourcing expenses

1,200

51,408

600

1,500

780

5,886

Nonlife insurance

1,950

2,646

379

999

814

392

Depreciation and amortization

243,470

120,753

22,405

194,603

61,13835,460Loss on retirement of noncurrent assets

29,672

-

-

-

-

-

Other costs

426

128,001

574

1,249

423

28,171(C) Net real estate operating income = (A) − (B)(41,536)402,268

139,073

599,012491,270

277,259(Reference) Occupancy rate

100.0%

98.5%

100.0%

100.0%

100.0%

90.9%(Reference) Number of tenants

1

37

1

1

1

3

- 51 -

Property No.

49

50

51

52

53

54

Property name

Hilton Nagoya

Hilton Tokyo
Narita Airport

International
Garden Hotel
NaritaHotel Nikko
Nara

Hotel Oriental
Express Osaka
Shinsaibashi

Hilton Tokyo
Odaiba

182

182

182

182

182

182

657,560

314,559

251,743

237,402112,963

1,338,676

222,000

168,000

210,000

55,200799,800

92,55983,74327,402

57,763538,876

-

-

-

-

-

Number of operating days(A) Real estate operating revenue subtotal
Fixed rent
Variable rent
Other revenue

Undisclosed(Note 3)
Undisclosed(Note 3)
Undisclosed(Note 3)(B) Real estate operating costs subtotal

412,718

152,611

105,942

99,99915,872335,585

Land lease and other rent expenses

111,200

-

-

-

-

-

Property taxes

50,05934,19018,84920,093

5,865

171,275

Outsourcing expenses

41,085

1,260

1,140

1,200

1,080

60

Nonlife insurance

3,966

2,793

1,175

2,234

118

2,995

Depreciation and amortization

98,272

113,794

84,30376,144

8,559

160,835

Loss on retirement of noncurrent assets

-

96

-

-

-

-

Other costs

108,134

477

473

327

249

418

(C) Net real estate operating income = (A) − (B)244,841

161,947

145,801

137,402

97,091

1,003,091(Reference) Occupancy rate

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%(Reference) Number of tenants

4

1

1

1

1

1

Property No.

55

56

57

58

59

Property name

UAN kanazawa

Sotetsu Fresa Inn
ShimbashiKarasumoriguchi

La’gent Stay
Sapporo Odori

Oriental Hotel
Kyoto Rokujo

60

Hotel Oriental
Hotel JAL City
Express Fukuoka
KannaiNakasukawabata
Yokohama

Number of operating days

182

182

182

182

182

182

(A) Real estate investment revenue subtotal

57,003

263,358

253,614

159,339

174,60367,500

Fixed rent

54,000136,6277,800

85,50087,00067,500

Variable rent

3,003

108,178

245,155

73,83987,603-

Other revenue-

18,553

659

-

-

-

(B) Real estate operating costs subtotal

13,62338,122

48,641

24,33919,825

21,177

Land lease and other rent expenses

-

-

-

-

-

-

Property taxes

1,783

6,279

9,699

4,364

4,617

4,212

Outsourcing expenses

780

2,655

1,080

1,080

1,260

900

Nonlife insurance

160

290

548

313

299

340

Depreciation and amortization

10,130

11,25936,94818,21813,28815,317

Loss on retirement of noncurrent assets

-

-

-

-

-

-

Other costs

769

17,637

364

362

360

407

(C) Net real estate operating income = (A) − (B)43,379225,236

204,973

134,999

154,778

46,322(Reference) Occupancy rate

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%(Reference) Number of tenants

1

4

2

1

1

1

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

Variable rent includes income from management contracts. For details of the management contract, please refer to “(iii). Overview of the hotel business;
a. Rent structures of hotels with variable rent, management contract or revenue sharing” on page 53.
Figures are rounded down to the nearest millions of yen because the lessee’s consent to disclose rent in units of thousands of yen has not been obtained.
Undisclosed as the consent on disclosure has not been obtained from the tenant with whom a lease contract has been concluded.
The property numbers of assets sold before the end of the previous fiscal year are intentionally omitted.

- 52 -

(iii) Overview of the hotel businessa. Rent structures of hotels with variable rent, management contract or revenue sharing
Property
Name
No.
1
Kobe Meriken Park Oriental Hotel
2

Oriental Hotel Tokyo Bay

3

Namba Oriental Hotel

4

Hotel Nikko Alivila

5

Oriental Hotel Hiroshima

29
43(Total AGOP of the Five HMJ Hotels (Note 1) –base amount (¥4,120 million/year (Note 2))) x 85.0%

Oriental Hotel Universal City

Variable/Fixed(AGOP – base amount (¥370 million/year)) x 95.0%

Variable/Fixed
Variable/Fixed(Note 3)
Variable/Fixed(AGOP – base amount (¥655 million/year)) x 95.0%

46

Oriental Hotel Okinawa Resort & Spa
ACTIVE-INTER CITY HIROSHIMA(Sheraton Grand Hiroshima Hotel)
Oriental Hotel Fukuoka Hakata Station

47

Holiday Inn Osaka Namba

Variable/Fixed(AGOP – base amount (¥580 million/year)) x 97.0%

48

Hotel Oriental Express Fukuoka Tenjin

Variable/Fixed(AGOP – base amount (¥165 million/year)) x 97.0%

50

Hilton Tokyo Narita Airport

Variable/Fixed(AGOP – base amount (¥450 million/year)) x 93.0%

51International Garden Hotel Narita

Variable/Fixed(AGOP – base amount (¥360 million/year)) x 98.0%

52

Hotel Nikko Nara

Variable/Fixed(AGOP – base amount (¥440 million/year)) x 95.0%

53

Hotel Oriental Express Osaka Shinsaibashi

Variable/Fixed(AGOP – base amount (¥128 million/year)) x 91.0%

54

Hilton Tokyo Odaiba

Variable/Fixed(AGOP – base amount (¥1,660 million/year)) x 98.0%

58

Variable/Fixed(AGOP – base amount (¥183 million/year)) x 93.5%

Variable/Fixed(AGOP – base amount (¥189 million/year)) x 92.0%

60

Oriental Hotel Kyoto Rokujo
Hotel Oriental Express
Fukuoka Nakasukawabata
Hotel JAL City Kannai Yokohama

Variable/Fixed(AGOP – base amount (¥150 million/year)) x 95.0%

32

ibis Styles Kyoto Station

33

ibis Styles Sapporo

34

Mercure Sapporo

59

The Accor
Group
HotelsThe IshinGroup
HotelsOther
hotels withvariablerent
or revenue
sharing(Note 1)
(Note 2)

(Note 3)(Note 4)(Note 5)(Note 6)

Method of calculating variable rent andincome from management contracts

Variable/Fixed

44
The 19HMJ
HotelsRent typeManagement contract(Note 4)35

Mercure Okinawa Naha

42

Mercure Yokosuka

12

the b suidobashi

37

the b ikebukuro39

the b hachioji

40

the b hakata

10

dormy inn Kumamoto

18

Comfort Hotel Tokyo Higashi Nihombashi

22

Smile Hotel Nihombashi Mitsukoshimae

25

Chisun Hotel Kamata

Variable

26

Chisun Inn Kamata

Variable

31

Hilton Tokyo Bay

49

Hilton Nagoya

55

UAN kanazawa

56

Sotetsu Fresa Inn Shimbashi-Karasumoriguchi

57

La’gent Stay Sapporo Odori(AGOP – base amount (¥360 million/year)) x 90.0%(AGOP – base amount (¥442 million/year)) x 98.0%

Amount equivalent to GOP

VariableAmount linked to GOP (Note 5)

Variable/Fixed

Amount linked to AGOP (Note 5)

Variable/Fixed
Fixed +
Revenue sharing
Fixed +
Revenue sharing(GOP – base amount (¥400 million/year)) x 40.0%
Amount that is a certain percentage of sales exceeding thethreshold (Note 5)
Amount that is a certain percentage of sales exceeding thethreshold (Note 5)
Amount that is the monthly GOP multiplied by 86.0%(¥0 if the amount is below ¥0)
Amount that is the monthly GOP multiplied by 86.0%(¥0 if the amount is below ¥0)
Amount that is a certain percentage of sales exceeding thethreshold (Note 5)
Variable rents linked to hotel sales, etc. (Note 5)

Fixed +
Revenue sharing
Variable
Fixed +
Revenue sharing
Fixed +
Revenue sharing
Variable(Room sales – base amount (¥270 million/year)) x 30.0%
Amount that is a certain percentage of sales exceeding thethreshold (Note 5)
Amount linked to GOP (Note 5)

AGOP (adjusted GOP) is calculated by subtracting certain fees and other items from GOP. The same shall apply hereinafter.
For the purpose of payments of variable rent from each hotel, etc. JHR has set individual GOP base amount for each hotel. The breakdown of the AGOP
base amount of the Five HMJ Hotels (¥4,120 million/year) is as follows:¥690 million for Kobe Meriken Park Oriental Hotel, ¥1,060 million for Oriental Hotel Tokyo Bay, ¥890 million for Namba Oriental Hotel, ¥1,250
million for Hotel Nikko Alivila and ¥230 million for Oriental Hotel Hiroshima.
The indicated figures are for Sheraton Grand Hiroshima Hotel, the main facility of ACTIVE-INTER CITY HIROSHIMA.
The management contract structure is a structure for hotel real estate owned by JHR in which JHR entrusts an operator to operate the hotel and takes
in the outcome of that business as real estate operating revenue. Specifically, JHR, the owner of the hotel real estate, concludes a management contract
with an operator and entrusts the operator with the tasks necessary to run the hotel business. JHR receives the hotel revenue achieved from the hotelbusiness (operation) by the operator and, at the same time, pays a management fee to the operator. This hotel revenue achieved is recognized as “realestate operating revenue through management contract” and is equivalent to the rent, which is the real estate operating revenue under the leasing
structure.
The detailed content of the contract is not disclosed as the consent for disclosure has not been obtained from the lessee.
Additionally, the rent type of Hotel Francs will change from Fixed to Variable/Fixed from October 31, 2024 onward. The hotel's variable rent will becalculated as (GOP – base amount (¥350 million/year)) x 52.0%.

- 53 -

b. Major indicators of the hotel business
The following tables indicate the figures related to the hotel business of the 19 HMJ Hotels for the operating period fromJanuary 1, 2024 through June 30, 2024, based on the data provided by the hotel lessees. While these indicators of the hotels
are among the indicators that show the operating status of the rooms departments, please note that they do not necessarily
represent the operating revenue and the ability to bear rent, etc., of the respective hotels, as the room rates and profit margins,etc. of the respective rooms available for sale are not uniform, among other reasons. As such, the indicators are no more than
the reference figures.
Kobe
Meriken Park
Oriental Hotel
Ratio tototal sales(%)

Oriental HotelTokyo Bay

Namba
Oriental Hotel

Ratio tototal sales(%)

Hotel Nikko
AlivilaRatio tototal sales(%)

Oriental Hotel
Hiroshima

Ratio tototal sales(%)

The Five HMJ Hotels
Total/Average

Ratio tototal sales(%)

Ratio tototal sales(%)

Occupancy rate

78.9%

－

87.0%

－

90.1%

－

72.2%

－

74.2%

－

80.8%

－

ADR (Note 1)

20,787－

26,993－

21,932－

27,390－10,565－23,091－

RevPAR (Note 2)

16,402－

23,495－19,753－

19,768

－

7,844

－

18,665－

Total sales

2,477

100.0

3,413

100.0

1,213

100.0

2,295

100.0

571

100.0

9,968

100.0

Rooms department

964

38.9

2,185

64.0

928

76.5

1,428

62.2

324

56.8

5,829

58.5

Food & beveragedepartment

1,394

56.3

1,072

31.4

58

4.8

707

30.8

233

40.8

3,464

34.7

Tenant department

33

1.3

103

3.0

204

16.9

1

0.1

0

0.0

342

3.4

Other departments(Note 3)

85

3.4

53

1.6

23

1.9

159

6.9

14

2.4

333

3.3

480

19.4

1,310

38.4

734

60.5

674

29.4

83

14.5

3,281

32.9

GOP

Oriental Hotel
Universal City
Ratio tototal sales(%)

Oriental Hotel
Okinawa
Resort & Spa
Ratio tototal sales(%)

Sheraton Grand
Hiroshima Hotel(Note 4)
Ratio tototal sales(%)

Oriental Hotel
Fukuoka
Hakata Station
Ratio tototal sales(%)

Holiday Inn
Osaka Namba
Ratio tototal sales(%)

Hotel Oriental
Express
Fukuoka Tenjin
Ratio tototal sales(%)

Occupancy rate

87.9%

－

51.5%

－

83.7%

－

91.2%

－

90.1%

－

91.6%

－

ADR (Note 1)

26,931－

24,349－26,863－

23,686－

19,062－

12,262－

RevPAR (Note 2)

23,682－

12,534－

22,484－

21,603－

17,180－

11,231－

Total sales

1,628

100.0

1,240

100.0

1,702

100.0

1,677

100.0

1,012

100.0

550

100.0

Rooms department

1,422

87.4

824

66.4

974

57.2

869

51.8

982

97.0

538

97.8

Food & beveragedepartment

201

12.4

359

28.9

690

40.5

676

40.3

－

－

6

1.1

Tenant department

－

－

17

1.4

－

－

118

7.0

17

1.7

－

－

Other departments(Note 3)

4

0.3

40

3.3

38

2.2

14

0.8

13

1.3

6

1.2

834

51.2

119

9.6

473

27.8

940

56.1

634

62.6

332

60.4

GOP

Hilton Tokyo
Narita Airport

International Garden
Hotel Narita

Ratio tototal sales(%)

Hotel Oriental
Express
Osaka Shinsaibashi
Ratio toRatio tototal sales
total sales(%)(%)

Hotel Nikko Nara

Ratio tototal sales(%)

Hilton Tokyo
OdaibaOriental Hotel
Kyoto Rokujo

Ratio tototal sales(%)

Ratio tototal sales(%)

Occupancy rate

89.0%

－

87.3%

－

63.9%

－

88.5%

－

82.8%

－

79.2%

－

ADR (Note 1)

12,088

－

8,410

－

15,269－11,877－35,538－13,490－

RevPAR (Note 2)

10,758

－

7,343

－

9,752

－

10,514－29,441－

10,687－

Total sales

1,522

100.0

801

100.0

1,220

100.0

238

100.0

4,979

100.0

367

100.0

Rooms department

1,073

70.5

619

77.2

586

48.0

237

99.8

2,427

48.7

323

88.1

Food & beveragedepartment

412

27.1

177

22.1

626

51.3

－

－

2,437

49.0

41

11.2

Tenant department

14

0.9

2

0.3

2

0.2

－

－

37

0.7

－

－

Other departments(Note 3)

23

1.5

4

0.4

7

0.5

1

0.2

77

1.6

3

0.8

386

25.3

265

33.1

264

21.7

127

53.6

1,448

29.1

170

46.5

GOP

- 54 -

Hotel Oriental
Express Fukuoka
Nakasukawabata
Ratio tototal sales(%)

The 19 HMJ Hotels
Total/Average(Note 5)
Ratio toRatio tototal sales
total sales(%)(%)

Hotel JAL City
Kannai Yokohama

Occupancy rate

90.0%

－

78.1%

－

81.7%

－

ADR (Note 1)

11,201－

11,626－19,806－

RevPAR (Note 2)

10,076

－

9,076

－

16,183

－

365

100.0

336

100.0

27,605100.0

Rooms department

336

91.9

281

83.7

17,31962.7

Food & beveragedepartment

27

7.4

49

14.5

9,164

33.2

Tenant department

－

－

－

－

549

2.0

Other departments(Note 3)

3

0.8

6

1.9

573

2.1

190

51.9

85

25.3

9,550

34.6

Total sales

GOP(Note 1)

ADR represents the average daily rate, which is calculated by dividing total room revenue for a certain period (including service charges) by the total
number of rooms sold during the period.
Service charges are 10% for Kobe Meriken Park Oriental Hotel, Oriental Hotel Tokyo Bay, Namba Oriental Hotel, Oriental Hotel Hiroshima, Oriental
Hotel Okinawa Resort & Spa, ACTIVE-INTER CITY HIROSHIMA (Sheraton Grand Hiroshima Hotel), International Garden Hotel Narita, Hotel
Nikko Nara, Oriental Hotel Fukuoka Hakata Station and Hotel JAL City Kannai Yokohama; 13% for Hotel Nikko Alivila, Hilton Tokyo Narita Airportand Hilton Tokyo Odaiba. Oriental Hotel Universal City, Holiday Inn Osaka Namba, Hotel Oriental Express Fukuoka Tenjin, Hotel Oriental Express
Osaka Shinsaibashi, Oriental Hotel Kyoto Rokujo and Hotel Oriental Express Fukuoka Nakasukawabata do not request service charges. The same shallapply hereinafter.

(Note 2)

RevPAR represents revenue per available room, which is calculated by dividing total room revenue for a certain period (including service charges) by
the total number of rooms available for sale during the period. The same shall apply hereinafter.

(Note 3)Figures for the other departments include sales of the department for sale of goods.

(Note 4)The indicated figures are for Sheraton Grand Hiroshima Hotel, the main facility of ACTIVE-INTER CITY HIROSHIMA.

(Note 5)

For Total/Average of the 19 HMJ Hotels, figures are calculated by JHR as references since no figures have been provided by the hotel lessees.

(Note 6)The occupancy rate is rounded off to one decimal place, while ADR and RevPAR are rounded off to the nearest whole number. Sales and GOP arerounded off to the nearest millions of yen. For the ratio to total sales, the ratio of sales in each department to total sales is rounded off to one decimal
place.

- 55 -

(2) Status of capital expenditures
a. Planned capital expenditures (Note)
The following table shows major estimated capital expenditure items for renovation work, etc., planned as of the end of themidterm period under review. Total capital expenditures for the second half of the year are planned to be ¥5,251 million.
Together with the capital expenditures in the first half of the year, total capital expenditures for the full year are planned tobe ¥7,311 million.
Name of property, etc.
(Location)
Kobe Meriken Park Oriental Hotel(Kobe city, Hyogo)
Kobe Meriken Park Oriental Hotel(Kobe city, Hyogo)
Oriental Hotel Tokyo Bay(Urayasu city, Chiba)
Namba Oriental Hotel(Osaka city, Osaka)
Namba Oriental Hotel(Osaka city, Osaka)
Hotel Nikko Alivila(Nakagami-gun, Okinawa)
Oriental Hotel Okinawa Resort & Spa(Nago city, Okinawa)
Hilton Tokyo Narita Airport(Narita city, Chiba)
Hilton Tokyo Narita Airport(Narita city, Chiba)
Hilton Tokyo Narita Airport(Narita city, Chiba)
Oriental Hotel Universal City
(Osaka city, Osaka)
Hilton Tokyo Bay(Urayasu city, Chiba)
Hilton Tokyo Bay(Urayasu city, Chiba)

PurposeScheduled period

Renovation of guest rooms(10th and 11th floor)
Renovation of prefabricated bathunits in guest rooms
Renovation of guest rooms(7th to 10th floor)
Renovation of 3rd floor front
desk, etc.

From April 2024
to August 2024
From April 2024
to August 2024
From May 2024
to November 2024
From August 2024
to December 2024
From July 2024
to December 2024
From October 2023
to June 2025
From January 2024
to August 2024
From November 2024
to December 2024
From November 2024
to December 2024
From February 2024
to December 2024
From January 2024
to October 2024
From May 2024
to July 2024
From November 2024
to December 2024

Renovation of 1st and 2nd floors
Installation of new emergency
generators
Exterior construction
Renovation of guest rooms
Renewal of air-conditioning
facilities in guest rooms
Renovation of central monitoring
systemRenewal of automatic fire alarmsystemRenewal of air-conditioning
facilities in guest rooms
Renewal of elevators
Total(Note)

Estimated construction costs(JPY1M)
Total
amountTotal amount
paid

280

－

100

－

950

358

780

－

520

－

752

39

210

－

87

5

58

－

78

－

71

－

81

－

82

－

4,051

402

New construction and renewal work include those for buildings, attached facilities, etc. as well as items classified as furniture and fixtures. The
scheduled period of the above-planned renovation work and whether the renovation work will be performed may change.

b. Capital expenditures during the period (Note)
Major construction work conducted by JHR during the midterm period under review that represents capital expenditures isoutlined below. Capital expenditures for the midterm period under review totaled ¥2,059 million, and repair expenses thatwere accounted for as expenses for the midterm period under review totaled ¥5 million. In aggregate, ¥2,065 million of
construction work was carried out.
Name of property, etc.
Purpose(Location)
Oriental Hotel Okinawa Resort & Spa Renovation of guest rooms(Nago city, Okinawa)(3rd phase)
Oriental Hotel Okinawa Resort & Spa Renewal of air-conditioning(Nago city, Okinawa)
facilities in guest rooms
Oriental Hotel Okinawa Resort & Spa
Painting of exterior wall
(Nago city, Okinawa)
Oriental Hotel Okinawa Resort & Spa
Renewal of piping(Nago city, Okinawa)

PeriodFrom September 2023
to April 2024
From September 2023
to April 2024
From September 2023
to April 2024
From September 2023
to April 2024

Construction costs(JPY1M)

Total(Note)

962
171
113
120
1,366

New construction and renewal work include those for buildings, attached facilities, etc. as well as items classified as furniture and fixtures.

- 56 -