Table of Contents
Ⅰ. Midterm Highlights
1. Midterm Highlights
Ⅱ. Operating Forecast for Full Fiscal Year andSummary of Midterm Settlement of Accounts
1. Operating Forecasts for FY12/2024(Previous Year's Results vs Current Forecast)
2. Midterm Results for FY12/2024
Ⅲ. External Growth
1. Trend of Asset Size
2. Overview of Assets Acquired in 2024
3. Effects of Assets Acquired in 2024 andActive Asset Management Strategy
Ⅳ. Internal Growth
1. Hotel Performance Forecasts for FY2024
2. Internal Growth through Active Asset Management
3. Rebranding Case Studies
4. Renovation Summary and
Results for 2023 and 1H2024
5. Capital Expenditure (CAPEX) and Depreciation
6. Rent Revision in 2024
7. ESG Initiatives

Appendix 1

3

5
6

10
12
14
15
16
17
18
19

Ⅴ. Financial Conditions
1. Financial Conditions

21

Ⅵ. Market Environment
1. Status of Domestic Accommodation Demand
2. Status of Inbound Visitors
3. Status of New Supply of Hotels

25
26
27

1.

JHR's Investment Targets

29

2.

Simultaneous Pursuit of Stability and Upside Potential

30

3.

External Growth Strategy

314.

Internal Growth Strategy

32

5.

Financial Strategy

33

Appendix 2

8
9Information of Properties

1.

Portfolio Map

35

2.

List of Portfolio

36

3.

Portfolio Diversification

37

4.

Rent Structure

38

5.

Property List

39

6.

Summary of Lease Contracts

41

7.

Balance Sheet

44

Appendix 3

Investors Composition and Investment Unit Price

1.

Major Unitholders and Classifications of Unitholders

46

2.

Changes in Investment Unit Price and Market Capitalization

47

Appendix 4

1

JHR's Characteristics and Strategy

Summary of the Asset Management Company

1.

Summary of the Asset Management Company

49

2.

Features and Governance of the Asset Management Company 50

Ⅰ. Midterm Highlights

1. Midterm Highlights
1. External Growth

2. Status of Hotel Operations

4. Changes in DPU and NAV per Unit

• Conducted a global public offering (PO) in June 2024.
In July, acquired four properties located in Shinjuku
and Okinawa at about 20% below appraised value• In 1H2024, RevPAR and sales increased by 18.6% and16.1% year-on-year (YoY), respectively• DPU for 2024 is expected to be JPY3,815 (+26.5%
YoY) due to the upward revision of 1H results• 2H2024 results are expected to be as strong asprevious forecast. Full-year RevPAR and sales areprojected to increase by 15.0% and 14.3% YoY,
respectively, resulting in a 20.9% increase in GOP• NAV per unit is projected to reach JPY86,178(+9.6% YoY), driven by an increase in appraisal
values• Through both external and internal growth,
accelerated JHR's growth cycle

Financing2024 Forecast (28 Hotels with Variable Rent, etc.(*2))

Public Offering

New Loans

JPY33.6Bn

JPY30.0Bn

2023(Result)

2024(Forecast)vs 2023

13,92016,008+15.0%

Rooms Dept.

39,24045,248+15.3%

F&B Dept.

18,124

21,153+16.7%

Others

2,885

2,456

(14.9%)

Total

60,24968,857+14.3%GOP (JPY MM)

20,84925,213+20.9%

RevPAR (JPY)

Four Properties Acquired in 2024
Sales
(JPY MM)

Total
Appraisal Value
JPY69.0Bn

Total
Acquisition Price

MIMARU Tokyo
Shinjuku West

HOTEL AMANEK
Shinjuku-Kabukicho.

3. Financial Soundness

JPY56.1Bn
OKINAWA
Southern Beach
HARBOR-VIEW HOTEL Hotel & Resort
OKINAWA

JHR's Portfolio(as of the end of July 2024)• In 1H2024, refinanced JPY30.9 billion• Refinanced JPY3.3 billion through a green loan
• In July, procured new loans of JPY30.0 billion forproperty acquisitions, with a maximum term of sevenyears• As of the end of July 2024, the fixed interest rate ratio
stood at 73.7%, up 7.8pt from the end of FY12/2023(as of the end of July 2024)

Total Asset size

No. ofProperties

Acquisition PriceAppraisal Value(*1)

51 properties

JPY453.1Bn

JPY623.8Bn

LTV(total asset base)

42.3%

Fixed Interest
Rate Ratio

73.7%

Average Life ofInterest-bearing
Debt

3.5 years

Changes in DPU
(JPY)
4,000

3,690

+JPY800(+26.5%)
3,764

3,815

3,015
3,000

2,000

1,000 0FY12/2019
FY12/2023
2019/12期
2023/12期
ResultResultFY12/2024
2024/12期
2024/12期

Previous(前回予想)
Forecast(*3)(PO)

Current(今回予想)
Forecast

Changes in NAV per Unit

+JPY7,517(+9.6%)(JPY)
90,00083,28678,66180,00086,17880,42270,00060,0000

FY12/2019
FY12/2023
2019/12期
2023/12期
ResultResultFY12/2024
2024/12期
2024/12期

Previous（前回予想）

Forecast(*3)（PO）

Current（今回予想）
Forecast(*4)(*1) The appraisal value for properties held as of the end of June 2024 is based on the end-June 2024 appraisal; for properties acquired in 2024, the appraisal value is based on the appraisal at acquisition.
(*2) For the definition of "28 Hotels with Variable Rent, etc.," please refer to the note on page 12.
(*3) Previous Forecast refers to the forecast figures announced in "Notice Concerning Revision of Operating and Dividend Forecast for the Fiscal Year Ending December 2024 (25th Period)" and "Supplementary Material for Press Releases dated Today" (Japanese only) dated
June 24, 2024.
(*4) The appraisal value for properties held as of the end of June 2024 is calculated based on the end-June 2024 appraisal; for properties acquired in 2024, the appraisal value is calculated based on the appraisal at acquisition.

3

Ⅱ. Operating Forecast for Full Fiscal Year andSummary of Midterm Settlement of Accounts

1. Operating Forecasts for FY12/2024 (Previous Year's Results vs Current Forecast)[Reference]

Properties(JPY MM)

Difference from
Previous Year

Result(A)

Current Forecast(B)(B)–(A)

Properties Properties
Existing Acquired in Acquired in
Properties
2023
2024

%

（*3）

(JPY MM)

Result

4

–

–

–

4

43

Acquisition Price

396,918

453,108

56,190

14.2%

–

–

56,190374,508

32,910

6,335

23.8%

3,802

1,303

1,229

28,27826,57432,910

6,335

23.8%

3,802

1,303

1,229

28,278Fixed Rent

57.5% 14,658

50.7% 16,128

1,469

10.0%

89

474

904

58.8% 15,931

Variable Rent

42.5% 10,844

49.3% 15,699

4,854

44.8%

3,716

816

321

41.2% 11,176

Other Income

1,070

1,082

12

1.1%

(3)

12

3

1,170

22,34428,484

6,140

27.5%

3,736

1,202

1,200

24,087

5.6%

6.3%

0.7pt

5,083

5,630

547

175

128

243

4,557

153

245

92

92

–

–

NOI after Depreciation(*2)

17,10822,608

5,500

3,469

1,074

957

NOI Yield after Depreciation

4.3%

5.0%

0.7pt

5.1%

SG&A

2,093

2,410

316

2,132

Operating Income

15,014

20,198

5,183

34.5%

17,148

Ordinary Income

13,135

17,645

4,509

34.3%

15,291Net Income

13,134

17,644

4,510

34.3%

15,290

845

1,802

957

113.2%

1,176

NOI(*2)NOI Yield
Depreciation
Loss on Retirement ofNoncurrent Assets, etc.

Use of Negative Goodwill+386+3,382+3,768

+386

+290

+676

–

+468

+468

The Ishin Group Hotels(*5)

+54

+101

+156

Properties acquired in 2024

+904

+321

+1,225

Other properties

+123

+580

+704

+88

+525

+614

+1,469+4,854

6,323

The 19 HMJ Hotels(*5)
Properties acquired in 2023
The Accor Group Hotels(*5)

Properties acquired in 2023
Total

Breakdown of Negative Goodwill
JPY1,240MM50-year amortization amount on
negative goodwill:

JPY262MM

248

Cope with loss on retirement of
noncurrent assets:

JPY243MM

19,281

Amortization of trademark rights:

JPY56MM

Total amount: JPY1,802MM

13,98019,445

5,464

39.1%

16,466

4,637,006

5,097,006

460,000

9.9%

4,462,347

Dividend per Unit (JPY)

3,015

3,815

800

26.5%

3,690

5

Total

:

Number of Units Issued(Unit)

Total Dividends

Variable
Rent

Dilution

6.4%

32.2%

Fixed
Rent

(*4)

51

26,574Main Factors of Difference fromthe Previous Year's Results

FY12/2019(20th Period)

Breakdown of Variance

47

Real Estate Operating
Revenue

Profit and Loss

FY12/2024(25th Period)

No. of Properties

Operating Revenue

Dividend

FY12/2023(24th Period)(*1) For details, please refer to the Midterm Financial Report for FY12/2024
dated August 22, 2024.
(*2) Each is calculated using the following formula: NOI (Net Operating
Income) = Real estate operating revenue − Real estate operating costs +Depreciation + Loss on retirement of noncurrent assets + Asset retirement
obligations expenses.
NOI after depreciation = Real estate operating revenue − Real estate
operating costs(*3) The figure shown is the impact amount due to the following properties
acquired in 2023 (including tenants): UAN kanazawa, Sotetsu Fresa Inn
Shimbashi-Karasumoriguchi, La’gent Stay Sapporo Odori, Oriental Hotel
Kyoto Rokujo, Hotel Oriental Express Fukuoka Nakasukawabata and Hotel
JAL City Kannai Yokohama. The same shall apply hereinafter.
(*4) The figure shown is the impact amount due to the following properties
acquired in 2024 (including tenants): MIMARU Tokyo Shinjuku West,
HOTEL AMANEK Shinjuku-Kabukicho, OKINAWA HARBORVIEW HOTEL andSouthern Beach Hotel & Resort OKINAWA. The same shall apply
hereinafter.
(*5) Please refer to (*2) to (*4) on the next page for information on the 19
HMJ Hotels, the Accor Group Hotels and the Ishin Group Hotels.

2. Midterm Results for FY12/2024[Reference]
FY12/2023(24th Period)

FY12/2024(25th Period)

Midterm Result(A)

Midterm Result(B)(B)–(A)

No. of Properties

43

47

4

–

–

4

–

43

Acquisition Price

373,992

396,918

22,926

6.1%–

22,926–

374,508

Operating Revenue

11,28814,362

3,074

27.2%

2,227

846

–

Properties(JPY MM)

Profit and Loss

Real Estate Operating
Revenue

Difference from
Previous Year%

Breakdown of Variance

FY12/2019(20th Period)

Properties Properties
Existing
Acquired in Acquired in
Properties
2023
2024

Midterm Result+240+2,023+2,263

+161

+401

+267

+267

12,719The Ishin Group Hotels(*4)

–

+122

+122

Properties acquired in 2024

–

–

–

27.2%

2,227

846

–

12,719Fixed Rent

67.5% 7,250

54.7% 7,572

322

4.4%

(1)

323

–

62.1% 7,537

Variable Rent

32.5% 3,494

45.3% 6,270

2,776

79.5%

2,264

511

–

37.9% 4,606

Other Income

544

519

(24)

(4.5%)

(36)

11

–

576

NOI

9,198

12,256

3,058

33.3%

2,261

797

–

10,679Depreciation

2,440

2,628

187

100

87

–

2,165

Loss on Retirement ofNoncurrent Assets, etc.

18

43

25

25

–

–

219

NOI after Depreciation

6,739

9,584

2,845

2,135

709

–

8,294

979

1,086

106

Operating Income

5,759

8,498

2,738

47.5%

7,293

Ordinary Income

4,897

7,434

2,537

51.8%

6,354

Net Income

4,896

7,433

2,537

51.8%

6,353

1,001

Properties acquired in 2023

Total

–

3,074

6

The 19 HMJ Hotels(*2)

Variable
Rent

+240

14,362

SG&A(JPY MM)
Fixed
Rent

The Accor Group Hotels(*3)

11,28842.2%

Main Factors of Difference fromthe Previous Year's Results

Other properties

+82

+362

+444

Properties acquired in 2023

+83

+350

+433

Total

+322

+2,776+3,098(*1) For details, please refer to the Midterm Financial Report for FY12/2024
dated August 22, 2024.
(*2) The 19 HMJ Hotels refers to the following 19 hotels: five hotels of Kobe
Meriken Park Oriental Hotel, Oriental Hotel Tokyo Bay, Namba Oriental
Hotel, Hotel Nikko Alivila and Oriental Hotel Hiroshima (hereinafter called
the "Five HMJ Hotels"), plus 14 hotels of Oriental Hotel Okinawa Resort &Spa, Sheraton Grand Hiroshima Hotel (main facility of ACTIVE-INTER CITYHIROSHIMA), 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 and Hotel JAL City Kannai Yokohama. The same shallapply hereinafter.
(*3) 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 same shall apply hereinafter.
(*4) The Ishin Group Hotels refer to the following four hotels: the b suidobashi,
the b ikebukuro, the b hachioji and the b hakata. The same shall apply
hereinafter.

Ⅲ. External Growth1. Trend of Asset Size
 Improvement of the quality of JHR's portfolio and successive external growth through strategic asset replacement

Resume andaccelerate external growth

Trend of JHR's Total Asset Size(*1), etc. (JPY MM)COVID-19 pandemic
response period

122,285

April 2012
(merger)No. ofProperties

28

No. ofAcquisition－

No. of
Disposition－

130,883

FY12/2012

158,902173,429

FY12/2013

FY12/2014

225,723

FY12/2015

286,801

FY12/2016

319,474309,370

FY12/2017

FY12/2018396,918

374,508

370,031363,542

363,542

FY12/2019

FY12/2020

FY12/2021

FY12/2022 FY12/2023(13th Period) (14th Period) (15th Period) (16th Period) (17th Period) (18th Period) (19th Period) (20th Period) (21st Period) (22nd Period) (23rd Period) (24th Period)

28

28

30

36

41

44

41

9
5
2
2
3
3
(JPY10.8Bn) (JPY32.6Bn) (JPY15.7Bn) (JPY57.0Bn) (JPY61.0Bn) (JPY32.6Bn)

2

2

1

3

(JPY0.8Bn) (JPY2.6Bn) (JPY0.7Bn) (JPY4.8Bn)

－

－
3

－

(JPY12.1Bn)

43
2(JPY65.1Bn)

－

42
－

41
－

41
(*2)

(JPY0.7Bn)

1

1(JPY8.0Bn) (JPY11.3Bn)－－

453,108

End ofJuly 2024(25th Period)

47

51

6

4

－

－

(JPY33.3Bn) (JPY56.1Bn)

Aim for Successive GrowthMore than tripled after the merger
in about eight years

Properties Acquired in 2024
MIMARU Tokyo Shinjuku West
(Limited-service)
Acquisition Price

JPY9.64Bn

Appraisal Value

HOTEL AMANEK Shinjuku-Kabukicho.
(Limited-service)

OKINAWA HARBORVIEW HOTEL(Full-service)

Acquisition Price

Acquisition Price

JPY8.84Bn

JPY21.50Bn

Appraisal Value

Appraisal Value

Southern Beach Hotel & Resort OKINAWA(Resort)Acquisition Price

JPY16.20Bn
Appraisal ValueJPY11.70Bn

JPY12.80Bn

JPY24.20Bn

JPY20.30Bn

Target NOI Yield(*3)

Target NOI Yield(*3)

Target NOI Yield(*3)

Target NOI Yield(*3)

4.8%

5.5%

7.3%

6.3%

(*1) Asset size is based on the aggregate acquisition price of the properties at the end of each fiscal period. The same shall apply hereinafter.
(*2) JHR acquired the land that is part of the site of Oriental Hotel Universal City for JPY753 million on July 30, 2021.
(*3) Target NOI of assets acquired in 2024 is the NOI estimated by JHRA, reflecting the expected impacts and other factors of active asset management (All of the above figures are estimated as full-year NOI). For details on the assumptions of target NOI, please refer to thepress release "Notice Concerning Revision of Operating and Dividend Forecast for the Fiscal Year Ending December 2024 (25th Period)" dated June 24, 2024. Note that the target NOI calculation process and prerequisites include JHRA's judgment, evaluation andassumptions, and target NOI does not refer to the forecast for any future period, and future results may differ significantly. The same shall apply hereinafter.

8

2. Overview of Assets Acquired in 2024
 Acquired large hotels with unique features and growth potential in the Shinjuku and Okinawa areas
 Pursuing future upside through the active asset management
Name

MIMARU Tokyo Shinjuku West

HOTEL AMANEK
Shinjuku-Kabukicho.

OKINAWA HARBORVIEW HOTELSouthern Beach
Hotel & Resort OKINAWA

Exterior

July 12, 2024

Acquisition Date

July 31, 2024

Acquisition Price

JPY9,645MM

JPY8,845MM

JPY21,500MM

JPY16,200MM

Appraisal ValueJPY11,700MM

JPY12,800MM

JPY24,200MM

JPY20,300MM

Location

Shinjuku-ku, Tokyo

Shinjuku-ku, Tokyo

Naha city, Okinawa

Itoman city, Okinawa

Hotel Type

Limited-service

Limited-service

Full-service

ResortGrade

Upper-middle

Mid-price

Mid-price

Mid-price

No. of Guest Rooms

76 rooms

169 rooms

352 rooms

448 rooms
Fixed rent + Variable rent
Okinawa Hotel Management Co., Ltd.

Rent Type

Fixed rent + Variable rent

Fixed rent + Variable rent

Fixed rent + Variable rent
(Only fixed rent initially(*))

Hotel Lessee

Cosmos Initia Co., Ltd.

AMANEK Corporation

THE HOTELIER GROUP NAHA K.K.
（wholly owned subsidiary of HMJ)

• A recently-built hotel in central Tokyo
opened in late April 2023
• Conveniently located for tourism, approx.
a 10-minute walk from JR Shinjuku• Conveniently located for tourism, approx.
Stationa 10-minute walk from JR Shinjuku• Guest rooms are well-designed, with
Stationseparate baths, toilets and sinks for• All rooms accommodate four to six
enhanced functionality
2
guests, average 41.5m , and include• Located at the center of popular tourist
kitchens, utensils and dining tables
sites, the hotel can capture strong• Suited for mid/long-term stays by large
inbound demand with an averageoccupancy rate of over 90% sincegroups, capturing inbound demand
opening• A recently-built apartment hotel in thecenter of Tokyo that opened in March
2020

Overview• Okinawa's most traditional hotel with arich history, located in central Naha
• Convenient access: approx. a 10-minutedrive from Naha Airport and approx. a 7minute walk from Kokusai-dori street• High-class, full-service hotel whichaccommodates domestic andinternational VIPs, including members ofimperial families• Various room types, all with areas of
25m2 or more, catering to a broad target
market(*) The rent structure is as follows: until July 31, 2026, fixed rent only. On and after August 1, 2026, a combination of fixed and variable rent will apply.

9• Large resort hotel in Itoman, thesouthernmost part of Okinawa's mainisland, about a 20-minute drive fromNaha Airport• Direct beach access allows guests toenjoy various activities• Comfortable rooms over 30m2 withbalconies and separate baths/toilets• Features a garden pool with a water slide,an indoor pool, banquet halls, a wedding
chapel and restaurants

3. Effects of Assets Acquired in 2024 and Active Asset Management Strategy
 The expected NOI yield for the assets acquired in 2024 is 6.3%, driven by the active asset management

Estimated Acquisition Effects Based on
Expected NOI of Assets Acquired in 2024

Active Asset Management Strategy for
Assets Acquired in 2024
OKINAWA HARBORVIEW HOTEL(JPY MM)
Four Properties
Acquired in 2024

MIMARUTokyo
Shinjuku
West

HOTEL
AMANEK
ShinjukuKabukicho.

OKINAWA
HARBORVIEW HOTELSouthern
Beach Hotel& Resort
OKINAWA

Total

Acquisition Price

9,645

8,845

21,50016,20056,190• Plans to invest approx. JPY3.5 billion in CAPEX for a large-scalerenovation of swimming pools, guest rooms and restaurants during2025 to boost sales• Aims to improve GOP through collaboration with HMJ to maximize
upside through renovations

FY12/2024 Forecast NOI/Forecast Net Income (Annualized)

1975

1983

July 2024

During 2025

Property acquisition
The lessee became
HMJ's subsidiary

Large-scalerenovation(approx. JPY3.5Bn)

Forecast NOI

376

459

1,002

698

2,536

(Yield)

3.9%

5.2%

4.7%

4.3%

4.5%

Forecast NOI after
Depreciation

337

432

815

463

2,049

(Yield)

3.5%

4.9%

3.8%

2.9%

3.6%

Southern Beach Hotel & Resort OKINAWA

Forecast Net Income

208

313

527

246

1,296

• Intends to boost hotel revenue mainly by further refining revenue
management

Main South wingbuilding completedcompleted• Upon the fixed-term lease expiration in December 2025, will seek topursue upside through contract revisions

Effects of Active Asset Management, etc.

Target NOI/Target Net Income
Target NOI

464

486

1,570

1,019

3,540

(Yield)

4.8%

5.5%

7.3%

6.3%

6.3%

Target NOI after
Depreciation

Resumeregular operations

July 2024

December 2025

Propertyacquisition

Expiration ofcontract withthe current lessee

Pursue further upside via contract renewal,
including changes to the rent scheme

425

459

1,094

784

2,764

(Yield)

4.4%

5.2%

5.1%

4.8%

4.9%

MIMARU Tokyo Shinjuku West/
HOTEL AMANEK Shinjuku-Kabukicho.

Target Net Income

295

338

798

563

1,995

• Intends to boost hotel revenue mainly by further refining revenue
management10

Ⅳ. Internal Growth1. Hotel Performance Forecasts for FY2024 (1) ADR continues to rise with the high unit-price sales strategy, and the occupancy rate is expected to be in the 80% range. As a result,full year RevPAR is forecast to increase by 15%

Result and Forecast of Key Performance Indicators (Rooms Dept.)
Occupancy (right axis)

Total of the 28 Hotels with Variable Rent, etc.(*)
First Half

(JPY)
24,00020,00016,227

16,0004,000
0+11.0%+18.6%

12,0008,000

18,014

12,311

75.9%

19,184+6.8%+5.2pt2023
Result

14,601

80.8%

2024
Result2023
ResultFirst Half

24,00020,00018,05516,00012,00017,764+7.3%

21,286

+9.7%

+4.6%
+3.7pt

84.6%

78.4%

2024
Current Forecast

2023
Result16,008+5.7%+4.5pt82.8%
2024
Current Forecast

50%

0%

Full Year
22,99919,740+8.0%

17,302

100%

+8.8%

13,920+12.7%

16,183

19,330+15.0%

17,400

Second Half
19,806+18.3%

Full Year
20,57815,504

81.1%

RevPAR (left axis)

Second Half

+12.2%

Total of the 19 HMJ Hotels(JPY)

ADR (left axis)

19,507

21,441+8.6%+15.1%

15,508

13,685100%

17,854
50%

8,000
4,000
0

(*)

75.8%
2023
Result+7.8%+5.9pt

81.7%

81.3%

2024
Result2023
Result+4.4%+3.5pt

84.8%

78.6%

2024
Current Forecast

2023
ResultThe 28 Hotels with Variable Rent, etc. refer to the 19 HMJ Hotels plus the Accor Group Hotels and the Ishin Group Hotels. The same shall apply hereinafter.

12

+6.0%
+4.7pt83.3%
2024
Current Forecast0%1. Hotel Performance Forecasts for FY2024 (2) The rooms dept. is expected to perform well, driven by strong ADR growth via high unit-price strategy, and the F&B dept. is also projected to see asignificant increase in sales
 Along with sales increase, further improvement in GOP margin is expected

Sales
Rooms Dept.

F&B Dept.

OthersGOP

Percentage change intotal sales

Percentage change inrooms dept. sales

Total of the 28 Hotels with Variable Rent, etc.
First Half

(JPY MM)

Percentage change in
F&B dept. sales

Second Half

Full Year
+14.3%

80,00070,00060,24960,00050,00040,00030,00020,00010,0000+16.1%

31,38827,046
1,492
8,345
17,209

1,393
9,778

+17.5%+19.3%

20,52322,031+12.2%

Total of the 19 HMJ Hotels
First Half

(JPY MM)

33,203

1,202
9,664

2024
Result2023
Result18,124

37,469+15.8%

2023
Result2,885+12.8%

39,24024,726+15.3%

45,2482024
Current Forecast

2023
ResultSecond Half

2024
Current Forecast

Full Year53,32060,00040,00027,60530,00023,94720,000

1,411
7,972

+15.0%

14,564+18.9%

2023
Result2,729+13.0%+15.3%

1,122
9,164

1,317
9,335

+16.9%

1,170
10,915

17,31918,720+12.7%

21,1052024
Result2023
Result17,30733,19029,37360,00050,000+20.9%+16.0%

20,00002024
Current Forecast

2023
Result13+15.4%

34.6%

36.6%

2023
Result2024
Current Forecast

80,00060,79570,0002,292

60,00020,07950,00040,00030,00033,28425,213

20,849(JPY MM)+14.0%

50,00070,00010,00070,000021,15380,00030,00080,00010,00068,85740,0001,254
11,488

GOP ratio (vs sales)(JPY MM)

2,456+16.7%*

38,42420,00010,0002024
Current Forecast0+20.3%

18,39922,127

34.5%

36.4%

2023
Result2024
Current Forecast

2. Internal Growth through Active Asset Management Realize upside potential through active asset management

Active Asset Management

Hotels1
Increase sales byimprovement ofhotel operation etc.

Increase of
Hotel Sales

Reduction of
Operating Costs
of Hotels

2

Review of cost by
restructuring(*1)• Aim to increase hotel sales through improvement of hotel
operation by measures including revenue management,changes in hotel operator, rebranding, renovation and upgrades• Stimulate and acquire leisure demand through the creation ofunique attractiveness of each hotel and highly competitive
products• Review the various costs and improve the revenue structure• Aim to maximize GOP through efficient management<Examples>• Initiatives by the HMJ Groupto improve sales• Rebranding and Renovation<Examples>• Restructuring by the HMJ GroupREIT

Improve GOP

Increase ofReal Estate
Operating
Revenue
Reduction ofReal Estate
Operating Costs

3
Revision in rent
structure, etc.

• Aim to increase the rent that JHR receives by raising therent burden ratio at the time of rebranding and other measures<Examples>• Changing rent structure
through rebranding• Introducing variable rent at thetime of lease contract revision

Reduction of costs for property management cost(*2), trust fee(*3), management contract fee, ground rent, etc.

Improve NOI

Maximize DPU(*1) Restructuring means the initiatives for restructuring the business and organization, including streamlining or downsizing unprofitable divisions and improving efficiency by consolidating back office or common functions.
(*2) Property management cost is the compensation paid to property management companies (which refers to property management companies that manage tenants of properties and repairs of buildings) based on a property management contract for each property.
(*3) Trust fee is the compensation paid to the trust banks, which is the owner of each property, under the trust agreement.

14

3. Rebranding Case Studies
 Post-acquisition rebranding and large-scale renovation utilizing HMJ's platform are expected to significantly increase profit above theaverage appreciation in the relevant market over the same period
Oriental Hotel Fukuoka Hakata Station(former Hotel Centraza Hakata)

Hotel Oriental Express Fukuoka Tenjin(former HOTEL ASCENT FUKUOKA)

Oriental Hotel Universal City
(former Hotel Keihan Universal City)• Acquired in April 2016
• Reopened under a new brand in April 2019
• Upgraded hotel grade from mid-price to uppermiddle• Added 27 rooms, made all rooms accommodate
two or more guests• Built a new 24-hour gym, redesigned the roof intoa garden• Acquired in August 2016

• Acquired in September 2012

• Completed full renovations in June 2021;
reopened under a new brand• Reopened under a new brand in December 2021

• Upgraded hotel grade from economy to mid-price• Changed the lessee to the HMJ Group; the rent
structure was changed from "fixed rent" to "fixed
rent + variable rent" (Rent increase)• Changed the lessee to the HMJ Group; the rent
structure was changed from "fixed rent + revenue
sharing" to "fixed rent + variable rent" (Rent
increase) Comparison between Pre-and Post-rebranding Comparison between Pre-and Post-rebranding Comparison between Pre-and Post-rebranding

Prerebranding(2017)

PostPercentage
rebranding
Change(2024 Forecast)

94.6%

91.5%

(3.1pt)ADR

JPY11,707

JPY23,563+101.3%

RevPAR

JPY11,071

JPY21,561

Hotel
Revenue

JPY2,464MM

Rent
NOI

Occupancy

NOI Yield

Prerebranding(2019)

PostPercentage
rebranding
Change(2024 Forecast)

86.1%

90.6%

+4.5ptADR

JPY7,224

JPY12,180+68.6%+94.8%

RevPAR

JPY6,219

JPY11,036

JPY3,374MM+37.0%

Hotel
Revenue

JPY632MM

JPY865MM

JPY1,772MM+104.8%Rent

JPY623MM

JPY1,526MM+144.8%

NOI

8.7%

21.2%

+12.5pt

Occupancy

NOI Yield• Completed full renovations in July 2022

Prerebranding(2019)

PostPercentage
rebranding
Change(2024 Forecast)

95.7%

88.6%

(7.0pt)ADR

JPY18,421

JPY30,097+63.4%+77.5%

RevPAR

JPY17,620

JPY26,674+51.4%

JPY1,091MM+72.7%

Hotel
Revenue

JPY2,122MM

JPY3,671MM+73.0%JPY334MM

JPY637MM+90.6%Rent

JPY700MM

JPY1,808MM+158.2%

JPY302MM

JPY602MM+99.5%NOI

JPY668MM

JPY1,786MM+167.0%

6.1%

11.5%

+5.4pt

11.1%

26.4%

+15.3pt

15

Occupancy

NOI Yield

4. Renovation Summary and Results for 2023 and 1H2024
 In 2023, JHR invested a total of JPY1,295 million in strategic capital expenditures (CAPEX Ⅲ), significantly increasing unit prices through renovations
 Renovations at La’gent Stay Sapporo Odori and Oriental Hotel Okinawa Resort & Spa, among the properties scheduled under CAPEX Ⅲ for 1H2024,
have been completed
NameRenovation
Scope

Oriental Hotel Tokyo Bay
Guest Room

Restaurant

Kobe Meriken Park Oriental Hotel
Guest Room

• Improved• Renovated into an• Established guest
merchantability by
exciting space, featuring rooms with lounge
separating the toilet,
access along with thea new live kitchen, with
Overview ofrenovation, aiming towash basin and bathtub a calm and gentle color
Renovationsell at a higher unit
scheme in its interior
in prefabricatedpricebathroom units• Grand Reopening:• Added beds by• Planned renovation
November 1, 2023
effectively utilizing theperiod: 2023 to 2026
living room space,aiming to sell at ahigher unit price byincreasing DOR(*1)

Restaurant

Oriental Hotel Okinawa Resort & Spa

La’gent Stay
Sapporo Odori

Guest Room

Guest Room

• Renovated into a high- • After the rebranding in October 2021, unrenovated • Renovated 19 large
residential-type guest
quality space where you guest rooms were renovated sequentially starting
rooms (39–49m2),
in 2022can enjoy the chef's
signature dishes while
adding extra beds to• Renovation of all guest rooms completed in Apriltaking in theincrease capacity from2024
spectacular view as if
two to three to ayou were sailing on a
maximum of five
• All guest rooms offer ocean views and are at leastcruise shippeople, aiming to2
44m in size. The rooms have been renovated into
achieve high unit pricefunctional spaces that are ideal for long-term stays, sales through increased• Grand Reopening:making them perfect as a base for exploring
December 9, 2023
DOR
"Yanbaru," a UNESCO World Natural Heritage site

• Planned renovation
period: 2023 to 2025
Renovation
PeriodMay to Jul. 2023

2023

May to Aug. 2023

2023

Sep. to Dec. 2023

Jan. to Apr. 2024

Apr. 2024

No. of Rooms
subject toRenovation

99/511 rooms－

62/323 rooms－

96/361 rooms

192/361 rooms

19/219 rooms

Renovation
Cost

JPY382MM

JPY63MMJPY214MM

JPY165MM

JPY470MM

JPY962MM

JPY45MM

Results(*2)

ADR for 1H2024:
JPY30,128

ADR for 1H2024:
JPY23,222

Per-customer
Per-customer
spending for 1H2024:
spending for 1H2024:+47.8% vs 1H2019 +26.5% vs 1H2019 +35.3% vs 1H2019 +37.3% vs 1H2019

Post-renovation ADR for the entire hotel
from May to June 2024: JPY25,675+36.3% vs May to June 2019

Post-renovation ADR
from May to July
2024: JPY34,972+61.2% vs
May to July 2019(*1) DOR represents Double Occupancy Ratio, which is calculated by dividing the number of guests by the number of rooms sold, representing the average number of guests per room. The same shall apply
hereinafter.
(*2) The results represent the actual ADR outcomes for the renovated guest rooms.

16

5. Capital Expenditure (CAPEX) and Depreciation
 In principle, JHR implements appropriate CAPEX within the depreciation
 For FY12/2024, JHR plans to invest over JPY3.0 billion in CAPEX Ⅲ, aiming for strong unit price increase and sales growth, supported by the hotel
market entering a new growth phase(JPY MM)
8,000

CAPEX Ⅰ

7,311

capital investment related torenewal of buildings, facilities,
and equipment which is
required to maintain proper
values of properties

7,000
6,000

Depreciation

5,000

4,091
3,056

6,766
3,619
393
3,147

476

999

4,000
3,000

781

2,000
1,000

1,798

2,226

4,804

4,761

4,557

5,083

4,787

4,769

4,497
Oriental Hotel
Fukuoka Hakata Station
Cost for large-scalerenovation works

1,690

1,665
237

1,456

100

3,367

5,630
3,165

1,295

1,300

400

736

830

2,536

3,197

CAPEX Ⅲ
strategic capital investment
for renewals of guest rooms,
banquet rooms, restaurant
and others in order tomaintain or to improve thecompetitiveness of the hotels

3,745

2,738

1,328

0

Asset Size
(JPY MM)309,370

374,508

370,031363,542

363,542396,918

453,108

FY12/2018

FY12/2019

FY12/2020

FY12/2021

FY12/2022

FY12/2023

FY12/2024(forecast)

CAPEX Ⅲ to be implemented in FY12/2024

CAPEX Ⅱ
capital investment for fixtures,
furniture and equipment thatare not directly related tobuilding structures or facilities
but necessary for operating
hotelsAmount(scheduled)

Name

DetailPurposeAreas to be RenovatedOriental Hotel Tokyo Bay

Guest room renovation

Improve merchantability by making the wet area independent and increase
DOR by adding beds

216/511 rooms

JPY992MM

May to November 2024

Oriental Hotel Okinawa
Resort & Spa

Guest room renovation

Improve merchantability by addressing age-related deterioration andcreating high quality spaces

192/361 rooms

JPY968MM

Completed

Namba Oriental Hotel

Constructed new guest
rooms and a new lounge

Construct new guest rooms suitable for long-term stays and accommodatinglarge numbers of people, and enhance ancillary facilities, such as a lounge

Kobe Meriken Park Oriental Hotel

Guest room renovation

Improve merchantability by addressing age-related deterioration andcreating high quality spaces

79/323 rooms

La’gent Stay Sapporo Odori

Guest room renovation

Increase DOR by adding beds

19/219 rooms

Total

Front lobby, common areasand nine new guest rooms

JPY780MM August to December 2024(*)
JPY380MM

April to August 2024

JPY45MM

Completed

JPY3,165MM(*) The entire building will be closed during the construction period as the front floor will be inaccessible.

17

Period (scheduled)–6. Rent Revision in 2024
 In 2024, JHR successfully achieved rent increases at seven hotels through rent negotiations with hotel tenants

Overview of Rent Revision in 2024
Hotel

Lease Type

Rent Type(post-revision)

Revision Details• ibis Styles Kyoto Station
The Accor
Group
Hotels• ibis Styles Sapporo• Mercure Sapporo

The IshinGroup
Hotels–Management
contract

Rent increase

Reduced hotel management fees
for the Accor Group

Jan. 2025
Oct. 2024
Apr. 2024

Fixed-lease

Variable rent

Fixed-lease

Fixed rent +Variable rent

Same rent

Increased the fixed rent ratio byraising fixed rents to near 2019level

Aug. 2024

Japanese lease

Fixed rent

Same rent

No changes in rent conditions

Apr. 2024• La’gent Stay Sapporo Odori

Fixed-lease

Variable rent

Rent increase

Changed the calculation formula

May 2024• Hotel Francs

Fixed-lease

Fixed rent +Variable rent

Rent increase

Introduce GOP-linked variable rentwith fixed rent unchanged

Oct. 2024• the b ikebukuro• the b hachioji• the b hakata• Washington Hotel Plaza
Hakata, Nakasu
OthersJan. 2025• Mercure Okinawa Naha
• Mercure Yokosuka

Revision
Month

Sep. 2024

Rent Revision Schedule for 2025
Hotel

Lease Type

Current Rent Type

Revision Month• R&B Hotel Ueno-hirokoji

Japanese lease

Fixed rent

Apr. 2025 (Contract expiration)• Chisun Hotel Kamata

Fixed-lease

Variable rent

Dec. 2025 (Contract expiration)• MIMARU Tokyo Shinjuku West

Fixed-lease

Fixed rent + Variable rent

Apr. 2025 (Rent revision)• Southern Beach Hotel & Resort OKINAWA

Fixed-lease

Fixed rent + Variable rent

Dec. 2025 (Contract expiration)18

7. ESG Initiatives
 JHR formulated the policy on sustainability in December 2017. Aiming for medium to long-term growth in harmony and coexistencewith society and the environment, JHR implements initiatives to improve sustainability through appropriate responses to ESG issues

External Certification
GRESB(*1) Real Estate Assessment
Acquired "Green Star" for six consecutive years
from 2018

CASBEE(*2) Certification for Buildings(Two Properties)
Hilton Tokyo Odaiba

BELS(*3) Evaluation(Three Properties)
Hotel Nikko Alivila

Mercure Okinawa Naha

▶ In 2023, JHR was selected for"Sector Leader" inAsian hotel sector
for four consecutive years▶ Acquired "4-star"in GRESB Rating

CASBEE for Buildings(Existing Buildings)
Rank B+ (Good)UAN kanazawa

Oriental Hotel
Fukuoka Hakata Station

SMBC Environmental Assessment(*4)

CASBEE for Buildings(Existing Buildings)
Rank B+ (Good)Key Initiatives• Received an "A" grade forour excellent initiatives forenvironmental considerationsin asset management

Environmental Targets▶ Initiatives for Climate Change• In November 2021, support for the TCFD(*5) recommendations was
expressed by JHRA
• In August 2022, released initiatives for four disclosure themes
recommended by TCFD

• 30% reduction of GHG emissions per floor area(*6) in our portfolio (GHG emissions intensity)▶ Identification of Materialities• Identified seven key ESG-related materialities (key issues) from two
perspectives: stakeholder expectations and the impact on JHR's business• With regard to the Ozone Depletion Potential (ODP) and Global Warming Potential (GWP),
we aim to figure out the ODP and GWP of all refrigerants used in our properties. Upon
renewal of air conditioning equipment, we make selection of equipment with consideration
to ODP and GWP usage▶ Formulation of Green Finance Framework/
Implementation of Green Loan Financing• Formulated the Green Finance Framework for environmentally friendly
projects in January 2024 and procured funds via green financing inMarch 2024
• Will continue to promote environmental improvement efforts by using
the funds procured through the frameworkcompared to FY2017(*7)• We have a plan in place to eliminate the use of specified CFCs (CFC) and alternative CFCs
(HCFC, HFC) in short period by identifying the refrigerants used in the air-conditioning
equipment of all properties owned by JHR(*1) GRESB is an annual benchmarking program to evaluate ESG considerations of property companies and real estate funds. The GRESB Real Estate
Assessment is distinguished by its comprehensive evaluation of initiatives for sustainability of property companies, REITs and real estate funds,
not of individual properties. GRESB rating is a relative evaluation based on comprehensive scores.
(*2) CASBEE (Comprehensive Assessment System for Built Environment Efficiency) is a system for evaluating and rating the environmental
performance of buildings. In addition to environmental considerations such as energy conservation and the use of materials and equipment withlow environmental impact, it comprehensively evaluates the quality of buildings, including consideration for interior comfort and landscaping.
(*3) BELS (Building-Housing Energy-Efficiency Labeling System) is a display system of energy conservation performance of a building set by the
Ministry of Land, Infrastructure, Transport and Tourism.
(*4) SMBC Environmental Assessment Loan is a loan provided by Sumitomo Mitsui Banking Corporation based on environmental assessment conductedby the Japan Research Institute, Limited, which reviews the borrower's environmental management comprehensively.
(*5) TCFD is an abbreviation for Task Force on Climate-related Financial Disclosures.
(*6) Properties owned by JHR are managed by hotel lessees, etc. GHG emissions of JHR fall under Scope 3, Category 13, Leased Assets (Downstream).
(*7) The GHG emissions (GHG emissions intensity) for FY2017 (Baseline fiscal year, April 2017–March 2018) is 0.135 (t-CO2/m2).
(*8) ESG disclosure information on JHR website: https://www.jhrth.co.jp/en/esg/index.html

19

Ⅴ. Financial Conditions

1. Financial Conditions (1)Main Financial Indicators

New Borrowing and Refinancing in July 2024

(as of the end of June 2024)•

Procured new loans of JPY30.0 billion for property acquisitions on
July 12 and July 31, 2024. The loan term is a maximum of sevenyears, with JPY22.0 billion at fixed interest rate•

Refinanced the investment corporation bond of JPY2.0 billion
maturing on July 31, 2024, with a new loan at a fixed interest rate
for a term of approx. six years

175.2Bn

Total interest-bearing debt

JPY

LTV (total asset base)

41.6%

Cost for interest-bearing debt(*1)

1.1%

Average life of interest-bearing debt(*2)

3.3 years

Free cash(*3)
Unrealized gain(*4)(as of the end of July 2024)

JPY

9.7Bn

Total interestbearing debt

LTV(total asset base)

Fixed interest
rate ratio

Average live ofinterest-bearingdebt

163.3Bn

JPY205.2Bn

42.3%

73.7%

3.5 years

JPY

Changes in Costs for Interest-bearing Debt andAverage Life of Interest-bearing Debt
Average Life of Debt
3.0%

Costs for Interest-bearing Debt

2.0%

3.5

2.8

2.9

3.3

1.0%

1.0%

1.0%

End of
End of
End of
FY12/2020
FY12/2021
FY12/2022(21st Period) (22nd Period) (23rd Period)

1.0%

3.5

1.2%

End of
End of June 2024
End of
FY12/2023(Midterm of
July 2024(24th Period) 25th Period)

2,800

30,000(as of the end of July 2024)
Investment Corporation Bonds
36,50032,800

4.0
3.0

1.1%

Loans

40,0005.0

1.0%

End of
FY12/2019(20th Period)(JPY MM)

6.0

4.3

0.0%

(year)

5.2

1.0%

Repayment Schedule of Interest-bearing Debt

32,225
10,00025,2808,000

2.0

20,0001.0
0.0(*1) Weighted-average costs for interest-bearing debt (including up-front fee, etc.) as of the end of each year. Rounded
off to one decimal place.
(*2) Average maturity of interest-bearing debt as of the end of each year.
(*3) Represent the balance of cash and deposits, excluding various reserves in trust, etc.
(*4) Unrealized gain are calculated by subtracting book value from appraisal value. The same shall apply hereinafter.

10,000

0

21

7,100

30,000

1,000
6,100
2024

13,10031,13732,22526,48913,70026,50023,137

26,48913,70012,180
2025

2026

2027

2028

2029

2030

2031

1. Financial Conditions (2)Lender List for Interest-bearing Debt

Breakdown of Interest-bearing Debt
(as of the end of July 2024)(JPY MM)
Lenders/Bond Name

Balance(as of the end of
December 2023)
Balance%

Balance(as of the end of
July 2024)
Balance%

Investment Corporation Bonds

Sumitomo Mitsui Banking Corporation
35,03320.0%
42,83320.9%
Mizuho Bank, Ltd.
22,84613.0%
29,446
14.3%
SBI Shinsei Bank, Ltd.
18,85810.8%
19,858
9.7%
Sumitomo Mitsui Trust Bank, Limited
15,235
8.7%
18,535
9.0%
Resona Bank, Limited
10,382
5.9%
12,682
6.2%
MUFG Bank, Ltd.
4,700
2.7%
10,0004.9%
Development Bank of Japan Inc.
6,355
3.6%
7,855
3.8%
Fukuoka Bank, Ltd.
4,636
2.6%
4,936
2.4%
Aozora Bank, Ltd.
3,652
2.1%
4,452
2.2%
The Chiba Bank, Ltd.
2,732
1.6%
3,032
1.5%
The Nishi-Nippon City Bank, Ltd.
2,500
1.4%
2,800
1.4%
The Tokyo Star Bank, Limited
2,260
1.3%
2,260
1.1%
The Nomura Trust and Banking Co., Ltd.
3,200
1.8%
2,000
1.0%
The Minato Bank, Ltd.
1,400
0.8%
1,900
0.9%
Hiroshima Bank, Ltd.
1,854
1.1%
1,854
0.9%
Kansai Mirai Bank, Limited
800
0.5%
1,800
0.9%
Sompo Japan Insurance Inc.
1,000
0.6%
1,000
0.5%
Daiwa Next Bank, Ltd.
–
–
1,000
0.5%
The Shizuoka Bank, Ltd.
588
0.3%
788
0.4%
The Bank of Okinawa,Ltd.
–
–
500
0.2%
Bank of The Ryukyus, Limited
–
–
500
0.2%
The Hokuriku Bank, Ltd.
300
0.2%
300
0.1%
Total of Bank Loans
138,331
78.9% 170,331
83.0%
Investment Corporation Bonds(for institutional investors)
6th Investment Corporation Bonds without Collateral
3,000
1.7%
3,000
1.5%
8th Investment Corporation Bonds without Collateral
1,100
0.6%
1,100
0.5%
9th Investment Corporation Bonds without Collateral
1,000
0.6%
1,000
0.5%
12th Investment Corporation Bonds without Collateral
2,000
1.1%
–
–
13th Investment Corporation Bonds without Collateral
2,800
1.6%
2,800
1.4%
Total of Investment Corporation Bonds
9,900
5.6%
7,900
3.8%
(for institutional investors)
Investment Corporation Bonds(for individual investors)
7th Investment Corporation Bonds without Collateral
9,000
5.1%
9,000
4.4%
10th Investment Corporation Bonds without Collateral
10,000
5.7%
10,000
4.9%
11th Investment Corporation Bonds without Collateral
8,000
4.6%
8,000
3.9%
Total of Investment Corporation Bonds
27,00015.4% 27,000
13.2%(for individual investors)
Total of Investment Corporation Bonds
36,90021.1% 34,900
17.0%
Total of Interest-bearing Debt
175,231 100.0% 205,231 100.0%

Variance

7.4%

17.0%

7,800
6,600
1,000
3,300
2,300
5,300
1,500
300
800
300
300
–
(1,200)
500
–
1,000
–
1,000
200
500
500
–
32,000

26.3%

73.7%

92.6%

83.0%

Long-term(scheduled repayment
within one year)

Long-term

Loans
Investment
Corporation Bonds

Fixed Interest Rate
Variable Interest Rate(*) Long-term represents debts with original maturity over one year, and short-term represents debts
with original maturity within one year.

Changes in LTV
50%

LTV (Total Asset Base)
40.6%

LTV (Apprisal Value Base)

42.2%

41.8%

41.4%

40.8%

34.2%

33.9%

34.0%

33.3%

41.6%

42.3%

31.6%

32.9%

40%
30%
20%

–
–
–
(2,000)–32.1%

End of
End of
End of
End of
End of
End of June 2024
End of
FY12/2019
FY12/2020
FY12/2021
FY12/2022
FY12/2023(Midterm of
July 2024(20th Period) (21st Period) (22nd Period) (23rd Period) (24th Period) 25th Period)

Status of Credit Rating(2,000)––––(2,000)30,00022

Japan Credit Rating Agency, Ltd.
(JCR)

A+ (Stable)

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

A

(Stable)1. Financial Conditions (3)Changes in Appraisal Value (Unrealized Gain)
Book Value(JPY Bn)
700

623.8

600
500
400

Unrealized Gain

525.9
437.5

493.3

485.4

483.1

554.8
176.1

133.7

163.3

358.0

391.9

391.5

151.5

126.5

127.1

125.0

374.3

366.7

358.3

130.7

525.7

300
200
100

306.7

447.7

0

Ratio of
Unrealized Gain

42.6%

40.5%

34.5%

35.5%

34.9%

34.1%

41.7%

39.3%

No. of Properties

41

43

42

41

41

47

47

51

FY12/2018(19th Period)

FY12/2019(20th Period)

FY12/2020(21st Period)

FY12/2021(22nd Period)

FY12/2022(23rd Period)

FY12/2023(24th Period)

End of June 2024
End of July 2024(*1)(Midterm of 25th Period)

Negative Goodwill<Policy for Use of Negative Goodwill>1.

2.

Add JPY262 million (50-year amortization amount of negative goodwill) to
dividends every fiscal year
In addition to above, dividends will be increased in response to the following
•
•
•
•
•

Cope with loss on sales caused by property dispositions
Cope with loss on retirement of noncurrent assets
Cope with dilution of dividend per unit
Cope with inconsistency between tax and accounting treatments (Amortization of
fixed-term leasehold of land, amortization of asset retirement obligations, etc.)
Cope with suspension of sales and such due to large-scale renovation works withsignificant impact on revenues<Amount Planned to Be Used in FY12/2024>:

JPY1,240MM50-year amortization amount on negative goodwill :JPY262MM

Cope with loss on retirement of noncurrent assets :JPY243MM

Amortization of trademark rights:

JPY56MM

Total amount:

JPY1,802MM

Dilution

Estimated Balance of Negative Goodwill
after the end of December 2024(*2)

JPY6,952MM(*1) The figures at the end of July 2024 are based on the end-June 2024 book value and appraisal value for properties held as of the end of June 2024; for properties acquired in 2024, the acquisition price and the appraisal at acquisition.
(*2) The amount after deducting the amount to be appropriated to dividend payment for FY12/2024 from the balance at the end of December 2024.

23

Ⅵ. Market Environment

1. Status of Domestic Accommodation Demand The number of Japanese overnight guests in domestic accommodations in 1H2024 was almost the same as the record high in 2023
 Domestic accommodation demand remained stable from 2023 through June 2024, maintaining slightly above the level of the same period in 2019

Changes in Number of Overnight Guests in Japan (by year)(*)(Guest nights in MM)
700
600
500
No. of InboundOvernight Guests

400

No. of JapaneseOvernight Guests

200

492

510

538

69

80

94

423

430

300

617

596
116

480

444

100
0

* Ratio of Overnight Japanese Guests

332
20

318
4

311

313

118

450
17

Cumulative figures fromJanuary to June
(2023 vs 2024)

500

434

283

305

49

77

234

228

2016

2017

2018

2019

2020

2021

2022

2023

2023
Jan.–Jun.

2024
Jan.–Jun.

85.9%

84.4%

82.5%

80.6%

93.9%

98.6%

96.3%

80.9%

82.7%

74.7%

Changes in Number of Japanese Overnight Guests in Domestic Accommodation Facilities (by month)(*)
No. of Japanese Overnight Guests (left axis)(Guest nights in MM)
60
50

87%
79% 82%

83%40

92% 96%86%95%

105%104%109%106%107%108%95%

vs 2019 (right axis)

110%
106%
105%105%103%106%
104%
102%104%
101%
100%

20

0

28

Jan.

23
Feb.

120%
100%
100%
80%

66%

30

10

95% 97%

103%

33

32

36

33

39

46

39

42

42

41

35

37

45

37

42

38

43

60%

54
42

44

42

40

34

36

42

37

40

37

40%
20%

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

2022

May

Jun.

Jul.

2023

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

2024

Source: "Statistics of Overnight Travel" by Japan Tourism Agency(*) No. of inbound overnight guests, No. of Japanese overnight guests and the total number of overnight guests are rounded off to the nearest million. The figures from 2016 to 2023 are final, those for January 2024 to May 2024 are second
preliminary figures, and those for June 2024 are first preliminary figures.

25

0%

2. Status of Inbound Visitors
 The number of inbound visitors has shown a remarkable recovery since 2023. The accumulated number in 2024 through June is +6.9% compared tothe same period in 2019, exceeding the pre-COVID-19 pandemic levels, reaching a record high Inbound visitors from China has not yet recovered to the 2019 level but has been steadily recovering on a monthly basis. Meanwhile, visitors fromother Asian countries, Europe, the U.S. and Australia are increasing, with further growth anticipatedChanges in Number of Inbound Visitors(*1)
China(Thousandpeople)35,00030,00025,00028,691

South Korea

U.S.

Monthly Inbound Visitors since 2023 (vs 2019)(*1)

Others200%

31,192 31,882
25,06624,040

+6.9%

180%

16,634 17,777

20,000U.S.
168.9%
Australia
165.8%

160%

Asia (*3)

15,000(ex. China)

2023

Breakdown of Inbound Visitors by Country(*1)

South Korea
25.0%

0%

Taiwan
16.8%

2023

2024

Jun.

20%

May

South Korea
17.5%

40%

Apr.

Taiwan
15.3%

U.S.
7.6%
Europe (*2)
4.3%
Vietnam
1.9%
Singapore
1.7%
Thailand
3.5%
Hong Kong
7.2%

60%

China
17.3%

Mar.

China
30.1%

Other
12.3%

Feb.

Europe (*2)
4.4%
Vietnam
1.6%
Singapore
1.5%
Thailand
4.1%

Hong Kong
7.2%

Australia
2.6%

China
75.0%

80%

Jan.–Jun. 2024

Other
10.9%

Total
108.9%Jan.

Australia
2.0%
U.S.
5.4%

100%
100%

Dec.

2019

120%
Jan.–Jun. Jan.–Jun.
2019
2024

Nov.

2022

Oct.

2021

Sep.

2020

Aug.

2019

Jul.

2018

Jun.

2017

May

2016

Europe109.9%

(*2)

246

Apr.

0

117.2%

Mar.

5,000

3,832

Feb.

4,116

140%

Jan.

10,000Source: Japan National Tourism Organization (JNTO)(*1) The number of inbound visitors is rounded off to the nearest thousand. The figures for 2016 through 2023 are final, those for January 2024 through April 2024 are provisional, and those for May and June 2024 are estimates.
(*2) Europe refers to UK, France, Germany, Italy, Spain and Russia, for which Japan National Tourism Organization's "Inbound Visitors Statistics" releases estimates.
(*3) Asia (ex. China) refers to South Korea, Taiwan, Hong Kong, Thailand, Singapore, Malaysia, Indonesia, the Philippines, Vietnam and India, for which Japan National Tourism Organization's "Inbound Visitors Statistics" releases estimates.

26

3. Status of New Supply of Hotels
 Japan's new hotel supply in 2024 is expected to increase slightly by 0.9% compared to the previous year

Supply of Rooms in Hotels/Ryokans in Japan
As of the end of July 2024
(No. of rooms)
80,00060,000＜Japan＞

54,051 59,079 49,115

Supply Forecast(No. of rooms)
80,00060,00030,030 27,196

40,000

ActualReference: as of the end of January 2024(*2)

20,00030,030 27,196

20,0009,147

054,051 59,079 49,115

40,00020,793 16,731 16,238
11,824＜Japan＞

ActualSupply Forecast

20,596 16,879
13,557 10,632808

0Ratio of New Supply

+3.4%

+3.6%

+2.9%

+1.7%

+1.5%

+1.1%

+0.9%

+0.9%

+0.6%

Ratio of New Supply

+3.4%

+3.6%

+2.9%

+1.7%

+1.5%

+1.1%

+0.9%

+0.7%

+0.6%

Excl. Tokyo, Osaka

+2.5%

+2.7%

+2.1%

+1.6%

+1.3%

+0.8%

+0.7%

+0.9%

+0.7%

Excl. Tokyo, Osaka

+2.5%

+2.7%

+2.1%

+1.6%

+1.3%

+0.8%

+0.7%

+0.7%

+0.6%

(%: change from theprevious year)

2018

2019

2020

2021

2022

2023

2024

2025

2026

(%: change from theprevious year)

2018

2019

2020

2021

2022

2023

2024

2025

2026

1,834

1,529

1,042

＜Tokyo＞(No. of rooms)
15,00020,00011,833 11,105 12,483

15,00010,000

3,293

5,000

5,430

3,720

11,833 11,105 12,483

10,000

1,668

1,828

1,237

0

＜Tokyo＞(No. of rooms)

3,293

5,000

862

5,430

3,806

165

0

Ratio of New Supply

+7.4%

+6.5%

+6.8%

+1.7%

+2.7%

+1.8%

+0.8%

+0.9%

+0.4%

Ratio of New Supply

+7.4%

+6.5%

+6.8%

+1.7%

+2.7%

+1.9%

+0.9%

+0.7%

+0.5%

(%: change from theprevious year)

2018

2019

2020

2021

2022

2023

2024

2025

2026

(%: change from theprevious year)

2018

2019

2020

2021

2022

2023

2024

2025

2026

962

220

＜Osaka＞(No. of rooms)
12,000
9,000

8,329

10,721

12,000

6,205

6,000

3,369

3,000

4,920

9,000

4,972

2,212

1,466
1,573

0

＜Osaka＞(No. of rooms)

8,329

10,721
6,205

6,000

630

3,369

3,000

4,920

5,220

2,212

0

Ratio of New Supply+9.9%+11.6%

+6.0%

+3.1%

+2.0%

+4.3%

+4.1%

+1.2%

+0.5%

Ratio of New Supply+9.9%+11.6%

+6.0%

+3.1%

+2.0%

+4.3%

+4.3%

+0.8%

+0.2%

(%: change from theprevious year)

2018

2019

2020

2021

2022

2023

2024

2025

2026

(%: change from theprevious year)

2018

2019

2020

2021

2022

2023

2024

2025

2026

Source: Estimated by the Asset Management Company using data from "Public Health Administration Report" by Ministry of Health, Labour and Welfare (MHLW), a weekly hotel & restaurant magazine (HOTERES) and Nikkei Telecom.
(*1) Ratio of new supply is the ratio of new rooms to be supplied in a year to the stock of rooms (Hotels/Ryokans) at the beginning of the year. With regard to the above data, please note that in case the number of rooms are stated as "to be
determined" by hotels, the asset management company has used 180, the average number of new supply of hotel rooms, for calculation.
(*2) These figures were announced in the Financial Results Briefing for FY12/2023. For the data from 2025 onward, only the figures for 2025 and 2026 have been extracted and presented.

27

Appendix 1
JHR's Characteristics and Strategy

1. JHR's Investment Targets
Strong ability in acquiring properties

Aim to increase dividend
for mid to long term Highly recognized as Japan's largest J-REIT specializing
in hotels
 High presence and credibility in the property market bycontinuously acquiring properties Capability to propose various acquisition schemes and to
execute acquisitions

High capability in achieving internal growthHighcapability inachievinginternal
growthStrongability inacquiringproperties

 Management approach through active asset management
strategies that achieves a good balance between stability
and upside potential
 Increase hotel revenue through collaboration with highquality operators
 Attract inbound demand through enhanced international
brand portfolio
 Strengthen and maintain competitiveness by investing inappropriate capital expenditures

Stablefinancingcapability

Stable financing capability
 Secure sound and stable finance Diversify financing methods29

2. Simultaneous Pursuit of Stability and Upside Potential
 JHR pursues both stability and upside potential by steadily implementing growth strategies

Ensure Stable Revenue

Pursue UpsideManagement
contract structure

Fixed rent structure

Variable rent
structure

Revenue-sharing
structure

Active Asset Management Strategies

 Appropriate monitoring of hotel operation
 Capital expenditures to maintain competitiveness and asset value

 Change in rent structures and rebranding Strategic capital expenditures, etc.

Maintain and improve rent-paying capacity of tenants, etc.

Increase in rental income, etc. throughimprovement in hotels' performance

Proportion of Rental Income

Proportion of Rent Structures(FY12/2024 forecast)(as of August 22, 2024)

Fixed rent only

9 properties
Fixed rent

Variable rent,etc.(*1)

50.7%

49.3%

Variable rent, etc.(*2)

42 properties(*1) Variable rent, Rent from revenue-sharing rent and Income from management contracts.
(*2) Fixed rent + variable rent structure, Fixed rent + revenue-sharing rent structure, Variable rent structure and management contract structure.

30

3. External Growth Strategy
Recognition ofExternal Environment
Trend of the Hotel
Investment Market
 The hotel market in Japan istransitioning to a new growth phase
after a period of recovery from the
COVID-19 pandemic, driven by strong
domestic demand for accommodationand inbound demand that exceeds the
pre-pandemic level.
 As for the hotel transaction market, notonly foreign funds, etc., but domestic
investors, including J-REITs, started toconsider hotel investment more actively
with expectations for the hotel market's
growth potential, as well as an easing
attitude toward finance for hotel assets
by financial institutions. Given these
conditions, hotel transactions may
become more active.
 For acquisition of hotels, it is important
to differentiate each hotel since thecompetitiveness of hotels is becoming
more evident in accordance with the
hotel specifications, locations and theabilities of hotel operators.

Basic Policies
 Acquire highly competitive hotel real estate, etc. in areas that have potential to attract "demand by both
domestic and inbound leisure customers" in the medium to long term Improve profitability, stability and quality of the overall portfolio

Key Measures
 Emphasize the superiority of buildings and facilities (infrastructure), operations (services), locations of hotel
real estate, etc.
• The prime investment targets are "full-service hotels" and "resort hotels" that have high barriers to entry
due to operation and management know-how, capital outlay and locations• For "limited-service hotels," the creditworthiness of the hotel lessee, the age of the building, location,
guest room composition and profitability are important• For limited-service hotels that specialize in selling single rooms, we will consider acquiring them
individually, taking into account the specifications and upside potential of the hotel• In particular, we will actively consider purchasing hotels that can be expected to grow internally throughan aggressive asset management strategy and hotels that can be expected to generate synergies withexisting properties Strategic investment areas• Hokkaido area, Tokyo and Bay area(*1), Osaka/Kyoto area(*2), Fukuoka area and Okinawa area
 Investigate and plan the internal growth strategy in property acquisition• At the time of contract renewal, etc., investigate appropriate rent levels and structures as well as thepotential for cost savings and building and facility improvement• Promote internal growth by collaborating with lessees and operators, especially when the hotel has
variable rent structure, etc.
 Respond to various investment opportunities by utilizing HMJ's efficient hotel operation platform, know-how
for operational improvement, etc.
(*1) Bay area includes the coastal area of Tokyo Bay in Kanagawa and Chiba prefectures. The same shall apply hereinafter.
(*2) Osaka/Kyoto Area refers to Osaka and Kyoto prefectures. The same shall apply hereinafter.

31

4. Internal Growth Strategy
Recognition ofExternal Environment
Hotel Market Environment

Basic Policies
 Pursue both stability and upside potential by steadily implementing active asset management strategies

 With more visitors from Asia, Europe
and the U.S., inbound demand is
expected to remain above pre-pandemic
levels, and accommodation demand isanticipated to continue to be strong.
 Although there are supply-demand
imbalances depending on markets dueto the continued supply of new hotels
against the backdrop of robust hotel
demand during the pre-pandemic period,
we believe there are no changes to themedium to long-term trend of
expansion in the tourism market
accompanying economic growth in the
Asia region, Western countries, etc., in
the post-COVID-19 society.
 While the market is entering a growthphase, upward pressure on costs andexpenses has occurred. We believe it is
key to increase unit prices byappropriately passing on higher costs,
conducting renovation, providing added
value, implementing appropriate
marketing strategies, etc.

Key Measures Planning and execution of the active asset management in order to realize pursuit in upside revenue• Make strategic CAPEX which will improve profitability and strengthen competitiveness mainly at hotels
with high growth potential• Raise rent and change to rent structures that can achieve upside revenue• Reduction of management contract fee of properties under management contract• Increase hotel revenue through collaboration with high-quality operators• Attract inbound demand through rebranding to international brands, etc.
• Make proactive proposals to build effective hotel operating structures which aim to maximize GOP, fromthe perspective of both hotel sales and expenses• Stimulate and capture domestic demand by creating products utilizing the characteristics of each hotel inline with the current market environment Planning and execution of strategic CAPEX which secure steady revenue, and monitoring of lessees• Analyze the creditworthiness of hotel lessees, understand income and expenditures of hotels, closely
observe and improve rent-paying capacity• Maintain and improve rent-paying capacity of tenants, etc. through capital expenditures, which lead tomaintain and improve competitiveness and asset value

32

5. Financial Strategy
Recognition ofExternal Environment
Trend of Financing Environment
and Interest Rates
 In the first half of 2024, J-REIT public
offerings sowed a year-on-year decline
in both number and total amount. The
TSE REIT Index dropped by around 4%
since the beginning of the year due towait-and-see factors such as the impactof rising interest rates following thenormalization of monetary policy by the
Bank of Japan.
 As the recovery and growth of hotel
performance become increasingly
evident and are expected to continue,
financial institutions are taking a morepositive stance.
 Certain caution remains required forchanges in interest rates due to the
Bank of Japan's policy reviews andoverseas factors.

Basic Policies
 Ensure healthy and stable finance Strengthen lender formation and relationships with financial institutions
 Diversify financing methods

Key Measures
 Improve financial stability by fixing interest rates, etc., as necessary, while considering diversification of
repayment dates
 Optimize financing costs
 Maintain LTV level at a maximum of 50% (total asset base) for the time being
 Maintain good relationship with financial institutions
 Diversify financing methods such as public offerings and issuance of investment corporation bonds

33

Appendix 2
Information of Properties

1. Portfolio Map
 Portfolio consisted of competitive hotels in areas with strong leisure accommodation demand Selectively invest in locations with high growth potential of leisure demand such as Strategic Investment Areas(as of the end of July 2024)
Strategic Investment Areas

Hokkaido Area

Existing Properties

22 ibis Styles Sapporo

Properties Acquired in 2024

23 Mercure Sapporo
44 La’gent Stay Sapporo Odori

Limited-service hotel

UAN kanazawa 42

JPY623.8Bn

Osaka/Kyoto Area
ibis Styles Kyoto Station 21
Oriental Hotel Kyoto Rokujo 45
Namba Oriental Hotel

Fukuoka Area

Oriental Hotel Universal City 19
Holiday Inn Osaka Namba 34

Toyoko Inn Hakata-guchi Ekimae 16

Hotel Oriental Express
40
Osaka Shinsaibashi

38 International Garden Hotel Narita
2 Oriental Hotel Tokyo Bay
20 Hilton Tokyo Bay
47 Hotel JAL City Kannai Yokohama

Hotel Oriental Express
46
Fukuoka Nakasukawabata

29 Mercure Yokosuka

8

7 Hakone Setsugetsuka

36 Hilton Nagoya

Okinawa Area

50 OKINAWA HARBORVIEW HOTEL
24 Mercure Okinawa Naha

Tokyo 23 wards

12 Washington Hotel Plaza Nara
39 Hotel Nikko Nara

Oriental Hotel Okinawa

6 The Beach Tower Okinawa

13,316 Rooms

37 Hilton Tokyo Narita Airport

Hotel Oriental Express Fukuoka Tenjin 35

4 Hotel Nikko Alivila

No. of Guest Rooms

28 Hotel Francs

Oriental Hotel Fukuoka Hakata Station 33

30 Resort & Spa

51 Hotels

26 the b hachioji

the b hakata 27

dormy inn Kumamoto

No. of Hotels

Tokyo & Bay Area

3

Washington Hotel Plaza Hakata, Nakasu 11

JPY453.1Bn

Total Assets(Appraisal Value)(*)

Full-service hotel
Resort hotel

Total Assets(Acquisition Price)

1 Kobe Meriken Park Oriental Hotel
5 Oriental Hotel Hiroshima

the b suidobashi

9the b ikebukuro 25
MIMARU Tokyo Shinjuku West 48

HOTEL AMANEK Shinjuku-Kabukicho. 49
Sotetsu Fresa Inn
43
Shimbashi-Karasumoriguchi

ACTIVE-INTER CITY HIROSHIMA

31 (Sheraton Grand Hiroshima Hotel)

Chisun Hotel Kamata 17

Southern Beach

51 Hotel & Resort OKINAWA

Chisun Inn Kamata 18(*) The appraisal value for properties held as of the end of June 2024 is based on the end-June 2024 appraisal; for properties acquired in 2024, the appraisal value is based on the appraisal at acquisition.

35

13 R&B Hotel Ueno-hirokoji
32 CANDEO HOTELS Ueno Koen
10 dormy inn EXPRESS Asakusa
Comfort Hotel Tokyo

14 Higashi Nihombashi

Smile Hotel Nihombashi

15 Mitsukoshimae

41 Hilton Tokyo Odaiba

2. List of Portfolio
The 28 Hotels with Variable Rent, etc.
1

2

Kobe Meriken Park
Oriental Hotel3

Oriental HotelTokyo Bay30

19

Oriental Hotel
Universal City35

The 19 HMJ Hotels
4

Namba
Oriental Hotel

33

39

Oriental Hotel Fukuoka
Hakata Station

ACTIVE-INTER CITYHIROSHIMA(Sheraton Grand Hiroshima Hotel)

Oriental Hotel
Hiroshima

34

Holiday Inn
Osaka Namba

38

37

Hotel Oriental Express
Fukuoka Tenjin

Hotel Nikko Alivila

31

Oriental Hotel
Okinawa
Resort & Spa

5

Hilton Tokyo Narita Airport

40

International Garden Hotel Narita

41

The Accor Group Hotels

21

ibis Styles Kyoto Station9

the b suidobashi

22

25

ibis Styles Sapporo

the b ikebukuro

23

Mercure Sapporo

24(as of the end of July 2024)

The Ishin Group Hotels

26

the b hachioji

Limited-service hotel

6

The Beach Tower
Okinawa

1245

Hotel Oriental Express
Osaka Shinsaibashi

46

Oriental Hotel
Kyoto Rokujo

Hotel Oriental Express
Fukuoka Nakasukawabata

Hilton Tokyo Odaiba

47

Hotel JAL City Kannai Yokohama

Mercure Okinawa Naha

8

10

HakoneSetsugetsuka

dormy inn
Kumamoto

dormy inn
Washington
EXPRESS
Hotel Plaza
Asakusa Hakata, Nakasu

14

11

15

16

Washington Hotel R&B Hotel
Smile Hotel
Comfort Hotel
Plaza Nara Ueno-hirokoji Tokyo Higashi
Nihombashi
Mitsukoshimae
Nihombashi

Toyoko Inn
Hakata-guchi
Ekimae

17

18

20

28

Chisun Hotel
KamataChisun Inn
KamataHilton Tokyo Bay

Hotel Francs

32

36

42

43

44

27

HiltonNagoyathe b hakata

UAN kanazawa

SotetsuLa’gent Stay
Fresa Inn
Sapporo Odori
ShimbashiKarasumoriguchi

Acquisition in 2024

29

48

Mercure Yokosuka

MIMARU Tokyo HOTEL AMANEK
Shinjuku West Shinjuku-Kabukicho.

36

Resort hotel

7

13

CANDEO HOTELS
Ueno Koen
Hotel Nikko Nara

Full-service hotel

49

50

OKINAWA
HARBORVIEW
HOTEL

51

Southern Beach
Hotel ＆ Resort
OKINAWA3. Portfolio Diversification
 Widely diversified and high-quality portfolio(as of the end of July 2024)

By Area(*)
Chubu
3.8%
Chugoku
4.7%
Kyushu(ex. Okinawa)
5.6%

By Hotel Brand(*)

Hokkaido
5.0%

Oriental Hotel
(HMJ)
21.1%

Others
24.6%

Tokyo
25.9%

Hotel Nikko/
Hotel JAL City
(Okura Nikko HotelManagement)
7.3%
Holiday Inn
(IHG)
6.0%
Sheraton
3.8%

Dormy Inn, etc.
(Kyoritsu Maintenance)
3.3%

Okinawa
18.1%

the b 2.8%

Kansai(ex. Osaka)
7.6%

Kanto
(ex. Tokyo)
17.9%

Mercure/ibis(Accor)
5.3%

Osaka
11.4%

Hilton25.8%

By Hotel Grade(*)

By Hotel Type(*)

Economy 2.8%
LuxuryResort

17.1%

20.9%

Mid-price
44.1%

Limitedservice
35.9%

Upper-

Full-service

middle

43.3%

36.0%

(*) All figures are calculated based on the acquisition price. Percentages are rounded to one decimal place.

37

4. Rent Structure Aim to secure stability through fixed rents and increase variable rents, etc. through active asset management strategies(FY12/2024 forecast)Rent Structure(*1)

Fixed rent

Fixed rent +Revenue-sharing rent

Fixed rent +Variable rent

Variable rentManagement contract

Type of Contract

Lease contract

Lease contract

Lease contract

Lease contract

Management contract

Fixed

○

○

○

–

–

–

Variable–

A certain percentage of sales
exceeding the threshold

A certain percentage of
hotel GOP

A certain percentage of
hotel revenue or hotel GOP

Hotel GOP–

JPY2,143MM(6.7%)

JPY3,310MM(10.4%)

JPY22,341MM(70.2%)

JPY2,135MM(6.7%)

JPY1,896MM(6.0%)

JPY31,827MM(100.0%)

Fixed Rent(*3)(%)

JPY2,143MM(6.7%)

JPY2,741MM(8.6%)

JPY10,966MM(34.5%)

JPY127MM(0.4%)

JPY149MM(0.5%)

JPY16,128MM(50.7%)

Variable Rent(%)–

JPY569MM(1.8%)

JPY11,375MM(35.7%)

JPY2,008MM(6.3%)

JPY1,746MM(5.5%)

JPY15,699MM(49.3%)CAPEX
Paid by JHR(*4)

1. Renewal of building andfacilities

1. Renewal of building
and facilities(3. Strategic investment)

1. Renewal of building andfacilities
2. Fixtures and equipment
3. Strategic investment

1. Renewal of building andfacilities
2. Fixtures and equipment
3. Strategic investment

1. Renewal of building andfacilities
2. Fixtures and equipment
3. Strategic investment–

No. of Properties

9

5

28

5

4

51

Acquisition Price(%)

JPY30,041MM(6.6%)JPY42,354MM(9.3%)

JPY329,060MM(72.6%)

JPY29,255MM(6.5%)

JPY22,397MM(4.9%)

JPY453,108MM(100.0%)

The Beach Tower Okinawa

Hilton Tokyo Bay

The 19 HMJ Hotels

Hilton Nagoya

ibis Styles Kyoto Station

Smile Hotel
Nihombashi Mitsukoshimae

The Ishin Group Hotels

Mercure Yokosuka

ibis Styles Sapporo

Comfort Hotel Tokyo
Higashi Nihombashi

MIMARU Tokyo Shinjuku WestType of
Rent(breakdown)

Real Estate
Operating Revenue(*2)(%)

Hotel Francs

HotelsCANDEO HOTELS
Ueno Koen
and other hotels

UAN kanazawa
Sotetsu Fresa Inn
Shimbashi-Karasumoriguchi

dormy inn Kumamoto
HOTEL AMANEK
Shinjuku-Kabukicho.
OKINAWA HARBORVIEW
HOTEL(*5)

Chisun Hotel Kamata

Mercure Sapporo

Chisun Inn Kamata

Mercure Okinawa Naha

Total

–

La’gent Stay Sapporo Odori

Southern Beach
Hotel ＆ Resort OKINAWA(*1) Rent structure is classified based on the type of rent under the lease contract and other contracts of hotels owned by JHR as of the end of July 2024.
(*2) Based on the revenue forecast for FY12/2024, which was announced in the Midterm Financial Report dated August 22, 2024. Revenue from trademark rights is excluded.
(*3) The fixed amount of real estate operating revenue does not include fixed rent from the hotel lessees as well as fixed rent and water utility expense income under the lease contracts for the non-hotel parts (offices,
signage, car park, retail shop, etc.) of the acquired assets.
(*4) The table lists a general scope of CAPEX paid by JHR and detail is individually stipulated in the lease contract of each hotel.
(*5) The rent structure is as follows: until July 31, 2026, fixed rent only. On and after August 1, 2026, a combination of fixed and variable rent will apply.

38

5. Property List (1/2)
No.

Property Name

Hotel Type
(*1)

Grade
(*2)

No. of
Guest
Rooms

LocationAge(*3)

Acquisition
Price(JPY MM)(*4)(as of the end of June 2024)

Appraisal ValueBook Value(JPY MM)(*5)

24th Period(as of December 31, 2023)
Appraisal
Value
CAP Rate(JPY MM)

25th Period(as of June 30, 2024)
Appraisal
Value
CAP Rate(JPY MM)

Investment
Ratio
(*6)

Revenue from
Real Estate
Operation(JPY1,000)
(*7)

NOI
(JPY1,000)(*7)

P/L from
Real Estate
Operation(JPY1,000)(*7)

NOI Yield(estimate)(*8)

1

Kobe Meriken Park Oriental Hotel

Full-service

Upper-middle

323

Hyogo

29.0

10,9009,648

14,1004.8%

14,7004.7%

2.4%

415,454292,292

135,183

7.6%

2

Oriental Hotel Tokyo Bay

Full-service

Upper-middle

511

Chiba

29.2

19,90017,45931,9004.4%

34,6004.4%

4.4%

1,042,577

980,213790,117

10.2%

3

Namba Oriental Hotel

Limited-service

Mid-price

258

Osaka

28.3

15,00014,22431,0004.1%

32,3004.0%

3.3%

667,836

610,222551,350

7.1%

4

Oriental Hotel Hiroshima

Full-service

Upper-middle

397

Hiroshima

30.2

18,90017,56528,2004.8%

29,1004.7%

4.2%

438,278

358,264

224,031

8.3%

5Hotel Nikko Alivila

ResortLuxury227

Okinawa

30.8

4,100

4,018

4,220

5.0%

4,330

4.9%

0.9%

79,71657,371

18,220

5.3%

6

The Beach Tower Okinawa

ResortMid-price

280

Okinawa

20.3

7,610

6,402

9,940

4.4%

10,2004.3%

1.7%

255,504

233,255

174,841

6.1%

7

Hakone Setsugetsuka

ResortMid-price

158

Kanagawa

17.7

4,070

3,490

5,390

4.8%

5,580

4.6%

0.9%

147,469

134,860

86,290

6.6%

8

dormy inn Kumamoto

Limited-service

Mid-price

291

Kumamoto

16.4

2,334

2,185

3,390

5.6%

3,650

5.5%

0.5%

109,513

98,05869,99810.2%

9the b suidobashi

Limited-service

Mid-price

99

Tokyo

37.8

1,120

1,141

2,330

4.1%

2,490

4.0%

0.2%

77,75972,31660,01911.5%

10

dormy inn EXPRESS Asakusa

Limited-service

Economy

75

Tokyo

27.3

999

915

1,320

3.9%

1,350

3.8%

0.2%

32,53727,89821,461

5.5%

11

Washington Hotel Plaza Hakata, Nakasu

Limited-service

Mid-price

247

Fukuoka

29.3

2,130

2,072

4,520

4.4%

4,610

4.3%

0.5%

120,000

112,000

99,000

10.5%

12Washington Hotel Plaza Nara

Limited-service

Mid-price

203

Nara

24.3

2,050

1,698

2,440

5.0%

2,460

4.8%

0.5%

75,00067,00048,000

6.5%

13

R&B Hotel Ueno-hirokoji

Limited-service

Economy

176

Tokyo

22.2

1,720

1,798

1,830

4.0%

1,880

3.9%

0.4%

48,64540,81431,030

4.7%

14

Comfort Hotel Tokyo
Higashi Nihombashi

Limited-service

Economy

259

Tokyo

16.4

3,746

3,383

5,470

4.3%

5,730

4.1%

0.8%

174,512

158,380

139,265

7.4%

15

Smile Hotel Nihombashi Mitsukoshimae

Limited-service

Economy

164

Tokyo

27.3

2,108

2,017

3,030

4.0%

3,070

3.9%

0.5%

98,58789,98879,232

7.0%

16

Toyoko Inn Hakata-guchi Ekimae

Limited-service

Economy256

Fukuoka

22.8

1,652

1,337

2,780

4.4%

2,770

4.4%

0.4%

70,51963,19054,275

7.6%

17

Chisun Hotel Kamata

Limited-service

Economy

105

Tokyo

32.4

1,512

1,451

2,080

4.6%

2,090

4.6%

0.3%

75,63368,362

49,1098.3%

18

Chisun Inn Kamata

Limited-service

Economy

70

Tokyo

21.2

823

776

1,430

4.4%

1,440

4.4%

0.2%

44,785

41,21435,016

9.1%

19

Oriental Hotel Universal City

ResortUpper-middle

330

Osaka

23.0

6,753

7,363

18,5004.8%

22,3004.7%

1.5%

791,903762,139645,25426.4%

20

Hilton Tokyo Bay

ResortLuxury

828

Chiba

36.0

26,05025,91940,2004.2%

42,7004.1%

5.7%

990,117

847,549

750,460

7.9%

21

ibis Styles Kyoto Station

Limited-service

Mid-price

215

Kyoto

15.2

6,600

6,550

9,990

4.2%

10,0004.2%

1.5%

200,116

178,408

161,868

5.2%

22

ibis Styles Sapporo

Limited-service

Mid-price278

Hokkaido

13.9

6,797

6,312

11,1004.7%

11,6004.6%

1.5%

218,474

169,714

128,406

7.1%

23

Mercure Sapporo

Limited-service

Mid-price285

Hokkaido

15.2

6,000

5,591

10,600

4.6%

12,4004.6%

1.3%

318,873

220,193

174,6138.4%

24

Mercure Okinawa Naha

Limited-service

Mid-price

260

Okinawa

14.9

3,000

2,733

7,070

4.6%

7,370

4.6%

0.7%

129,069

101,336

64,4867.3%

25

the b ikebukuro

Limited-service

Mid-price

175

Tokyo

42.0

6,520

6,598

7,200

4.2%

7,590

4.1%

1.4%

183,414167,210

151,398

5.5%

26

the b hachioji

Limited-service

Mid-price

196

Tokyo

37.9

2,610

2,689

2,610

5.1%

2,720

5.0%

0.6%

99,43487,44867,0776.4%

27

the b hakata

Limited-service

Mid-price

175

Fukuoka

26.8

2,300

2,318

4,520

4.3%

4,760

4.2%

0.5%

130,616

123,689

112,644

10.3%

28

Hotel Francs

Full-service

Mid-price

222

Chiba

32.9

3,105

3,171

4,130

4.6%

4,660

4.7%

0.7%

150,000

119,181

91,452

7.7%

29

Mercure Yokosuka

Full-service

Upper-middle

160

Kanagawa

30.7

1,650

1,659

3,210

4.6%

3,550

4.6%

0.4%

173,064

117,185

97,37515.4%

39

5. Property List (2/2)
No.

Property Name

Hotel Type
(*1)

Grade
(*2)

No. of
Guest
Rooms

LocationAge(*3)(as of the end of June 2024)

Appraisal Value

Acquisition
Price(JPY MM)(*4)

Book Value(JPY MM)(*5)

24th Period(as of December 31, 2023)
Appraisal
Value
CAP Rate(JPY MM)

25th Period(as of June 30, 2024)
Appraisal
Value
CAP Rate(JPY MM)

Investment
Ratio
(*6)

Revenue from
Real Estate
Operation(JPY1,000)
(*7)

NOI
(JPY1,000)(*7)

P/L from
Real Estate
Operation(JPY1,000)(*7)

NOI Yield(estimate)
(*8)

30

Oriental Hotel Okinawa Resort & Spa

ResortUpper-middle

361

Okinawa

19.4

14,95017,06818,3004.9%

19,5004.8%

3.3%

274,999

231,606-41,5366.5%

31

ACTIVE-INTER CITY HIROSHIMA(Sheraton Grand Hiroshima Hotel)

Full-service

Luxury238

Hiroshima

13.8

17,32017,051

20,4004.5%

20,5004.5%

3.8%

769,528

523,021402,268

6.0%

32

CANDEO HOTELS Ueno Koen

Limited-service

Mid-price

268

Tokyo

14.5

6,705

6,515

7,590

3.9%

7,620

3.9%

1.5%

174,985

161,479

139,073

4.8%

33

Oriental Hotel Fukuoka Hakata Station

Full-service

Upper-middle

221

Fukuoka

39.0

7,197

8,332

15,0004.5%

15,5004.5%

1.6%

917,380

794,438

599,01221.2%

34

Holiday Inn Osaka Namba

Limited-service

Mid-price

314

Osaka

15.9

27,00026,551

26,600

4.4%

27,3004.3%

6.0%

578,140

552,408491,270

4.4%

35

Hotel Oriental Express Fukuoka Tenjin

Limited-service

Mid-price

263

Fukuoka

25.2

5,248

5,733

6,650

4.6%

7,470

4.6%

1.2%

365,315

312,720

277,259

11.5%

36

Hilton Nagoya

Full-service

Luxury

460

Aichi

35.3

15,25015,455

14,9004.1%

15,5004.1%

3.4%

657,560

343,113244,841

4.7%

37

Hilton Tokyo Narita Airport

Full-service

Upper-middle

548

Chiba

30.9

13,175

13,15012,300

4.6%

13,2004.4%

2.9%

314,559

275,838

161,947

4.6%

38International Garden Hotel Narita

Full-service

Mid-price

463

Chiba

28.1

9,125

8,924

9,270

4.8%

9,620

4.7%

2.0%

251,743

230,105

145,801

5.5%

39

Hotel Nikko Nara

Full-service

Upper-middle

330

Nara

26.3

10,373

10,056

9,670

4.7%

9,810

4.7%

2.3%

237,402

213,546

137,402

4.8%

40

Hotel Oriental Express
Osaka Shinsaibashi

Limited-service

Mid-price

124

Osaka

6.4

2,738

2,781

2,890

4.6%

2,900

4.5%

0.6%

112,963

105,650

97,091

7.3%

41

Hilton Tokyo Odaiba

Full-service

Upper-middle

453

Tokyo

28.5

62,40063,246

68,2003.7%

72,700

3.5%

13.8%

1,338,676

1,163,927

1,003,091

4.0%

42

UAN kanazawa

Limited-service

Upper-middle

47

Ishikawa

6.8

2,050

2,052

2,200

4.6%

2,340

4.5%

0.5%

57,00353,51043,3795.7%

43Sotetsu Fresa Inn
Shimbashi-Karasumoriguchi

Limited-service

Mid-price

220

Tokyo

16.3

8,400

8,461

10,1003.8%

10,1003.8%

1.9%

263,358

236,496

225,236

4.5%

44

La’gent Stay Sapporo Odori

Limited-service

Mid-price219

Hokkaido

8.0

10,02010,403

10,8004.3%

11,5004.2%

2.2%

253,614

241,921204,973

5.3%

45

Oriental Hotel Kyoto Rokujo

Limited-service

Mid-price

166

Kyoto

4.8

4,446

4,608

5,940

4.3%

6,470

4.1%

1.0%

159,339

153,217

134,999

7.0%

46

Hotel Oriental Express Fukuoka
Nakasukawabata

Limited-service

Mid-price

183

Fukuoka

3.2

4,460

4,643

6,090

4.2%

6,280

4.1%

1.0%

174,603

168,066

154,778

7.2%

47

Hotel JAL City Kannai Yokohama

Limited-service

Mid-price

170

Kanagawa

17.6

4,000

4,042

4,340

4.1%

4,570

4.0%

0.9%

67,50061,63946,322

4.3%

48

MIMARU Tokyo Shinjuku West (*9)

Limited-service

Upper-middle

76

Tokyo

4.4

9,645

–

–

–

11,700

3.6%

2.1%

–

–

–

3.9%

49

HOTEL AMANEK Shinjuku-Kabukicho.
(*9)

Limited-service

Mid-price

169

Tokyo

1.3

8,845

–

–

–

12,800

3.7%

2.0%

–

–

–

5.2%

50

OKINAWA HARBORVIEW HOTEL (*9)

Full-service

Mid-price

352

Okinawa

49.2

21,500–––24,200

5.3%

4.7%

–

–

–

4.7%

51

Southern Beach Hotel & Resort
OKINAWA (*9)

ResortMid-price

448

Okinawa

15.2

16,200–––20,300

5.0%

3.6%

–

–

–

4.3%

–

–

13,316–24.7

453,108

391,574

525,740–

623,880–

100.0%

Total or Average

14,328,996 12,223,263

9,579,437

6.3%(*1) For hotel type, "Full-service" refers to a "full-service hotel," "Resort" refers to a "resort hotel," and "Limited-service" refers to a "limited-service hotel."(*2) Mainly based on ADR, etc., JHR has classified the hotels into four categories as "luxury," "upper-middle," "mid-price" and "economy."(*3) The age of each property as of the end of June 2024. Average age is the weighted average calculated as follows: The sum of (acquisition price of each property x property age)/total acquisition price.
(*4) The acquisition price in the purchase and sale agreement for beneficial interest in trust, etc. (Consumption tax, an amount equivalent to consumption tax, brokerage fee and other purchase-related costs are excluded.)(*5) Book value as of the end of June 2024.
(*6) The investment ratio column shows the ratio of the acquisition price of each property to the total acquisition price of the properties held as of the end of July 2024, rounded to one decimal place.
(*7) Actual for 6 months from January to June 2024. Since the lessees did not agree to disclose numbers in units of JPY1,000 for No. 11 and 12, the amounts are rounded down to the nearest JPY million.
(*8) NOI yield (estimate) is calculated based on NOI (estimate) for the full year FY12/2024. The NOI yields (estimate) through No. 48 to 51 are calculated by annualized NOI (estimate) for FY12/2024 of each property. The NOI yield (estimate) of the portfolio is calculated asfollows: Total NOI (estimate) for FY12/2024 (JPY28,484,689 thousand) / total acquisition price of the properties held as of the end of July 2024.
(*9) Since these properties were acquired in July 2024, the appraisal values ​at the end of June 2024 are the appraisal values at acquisition. The appraisal values ​at the end of December 2023 are omitted in the table and excluded from the total figures.

40

6. Summary of Lease Contracts (1/3)(as of the end of June 2024)
Lease
Type

Rent
Structure(*1)

Fixedlease

Fixed +
Variable

No.

Property Name

1

Kobe Meriken Park Oriental Hotel

2

Oriental Hotel Tokyo Bay

3

Namba Oriental Hotel

4

Oriental Hotel Hiroshima

5

Hotel Nikko Alivila

6

The Beach Tower Okinawa

Fixedlease

7

Hakone Setsugetsuka

Fixedlease

Hotel Operator/
Lease/ Expiration
Date of
Hotel Consulting andMCManagement Company Term Contract

Lessee(*2)

Contractual Rent(*3)

Rent Modification Summary

Rent Modification Summary(After acquisition)

Rent Modification Schedule(2024 to 2025)

TimingCondition

2024

2025

15

For The Five HMJ Hotels JPY3,221MM/year +Dec. 2034 when Hotel AGOP exceeds JPY4,120MM, theexcess x 85% is paid

In principle, the same rent will
be applied until expiration of
the contract.

Jan. 2023

Modified Structure

–

–

Fixed

20

Jun. 2026 JPY42MM/month

The same rent will be applied
until expiration of the contract.

–

–

–

–

Fixed

20

Oct. 2026 JPY24MM/month

The same rent will be applied
until expiration of the contract.

–

–

–

–

3

Mar. 2026

Rent can be modified throughmutual agreement.

Apr. 2023

Same fixed rent +Introduced variable rent––

Hotel Management Japan Co., Ltd.

Okura Nikko HotelManagement Co., Ltd.

Kyoritsu Maintenance Co., Ltd.

JPY16MM/month + when Hotel GOP exceeds
JPY400MM/year, the excess x 40% is paid

8

dormy inn Kumamoto

Fixedlease

Fixed +
Variable

9

dormy inn EXPRESS Asakusa

Japanese
Lease

Fixed

3

Mar. 2026 JPY5MM/month

Rent can be modified throughmutual agreement every three
years.

Apr. 2023

Same

–

–

10

Washington Hotel Plaza
Hakata, Nakasu

Japanese
Lease

Fixed

3

Mar. 2027 JPY20MM/month

Rent can be modified throughmutual agreement.

Apr. 2024

Same

–

–

11

Washington Hotel Plaza Nara

Japanese
Lease

Fixed

3

Mar. 2026 JPY11MM/month

Rent can be modified throughmutual agreement.

Mar. 2023

Same

–

–

12

R&B Hotel Ueno-hirokoji

Japanese
Lease

Fixed

20

Apr. 2025 JPY8MM/month

Rent can be modified throughmutual agreement.

Apr. 2011

Increased(+3.0%)–To be expired(Apr.)

13

Comfort Hotel Tokyo
Higashi Nihombashi

Fixedlease

Fixed +
Revenuesharing

Greens Co., Ltd.

20

Jan. 2028 JPY21MM/month + Revenue-sharing rent

Rent can be modified throughmutual agreement every five
years.

Apr. 2018

Same(Introduced
Revenue-sharing rent)

–

–

14

Smile Hotel Nihombashi
Mitsukoshimae

Japanese
Lease

Fixed +
Revenuesharing

THE KAMOGAWA GRAND HOTEL, LTD.

3

Mar. 2026 JPY11MM/month + Revenue-sharing rent

Rent can be modified throughmutual agreement.

Mar. 2023

Same

–

–

15

Toyoko Inn Hakata-guchi Ekimae

Japanese
Lease

Fixed

Toyoko Inn Co., Ltd.

30

Sep. 2031 JPY11MM/month

No rule has been stipulated.

Oct. 2007

Increased(+9.4%)––

16

Chisun Hotel Kamata

Fixedlease

Variable5

Dec. 2025

Hotel GOP x 86%(If the amount is below JPY0, it will be JPY0)–

Jan. 2021

Change in lessee andModified Structure–

To be expired(Dec.)

7

Dec. 2026

Hotel GOP x 86%(If the amount is below JPY0, it will be JPY0)–

Jan. 2020

Same

–

–

10.5 Dec. 2031

JPY350MM/year + when Hotel AGOP exceeds
JPY370MM, the excess x 95% is paid

In principle, the same rent will
be applied until expiration of
the contract.

Jul. 2021

Change in lessee andModified Structure––

Rent can be modified throughmutual agreement.

Jan. 2019

Renewed(Increased)

–

–

17

Chisun Inn Kamata

Fixedlease

Variable

18

Oriental Hotel Universal City

Fixedlease

Fixed +
Variable

19

Hilton Tokyo Bay

Fixedlease

Fixed +
Revenuesharing

Washington Hotel K.K.

Solare Hotels &Resorts Co., Ltd.

SHR Hotels, Co., Ltd.

K.K. Osaka Sakurajima Operations (*)
THE DAI-ICHI
BUILDING CO., LTD.

Hilton International
Company

6

Dec. 2028 JPY163MM/month + Revenue-sharing rent41

6. Summary of Lease Contracts (2/3)(as of the end of June 2024)
No.

Property Name

Lease
Type

Rent
Structure(*1)

20

ibis Styles Kyoto Station–

Management
contract

21

ibis Styles Sapporo–

Management
contract

Hotel Operator/
Lease/ Expiration
Date of
Hotel Consulting andMCManagement Company Term Contract

Lessee(*2)–

Contractual Rent(*3)

Rent Modification Summary

Rent Modification Summary(After acquisition)

Rent Modification Schedule(2024 to 2025)

TimingCondition

2024

2025

–

–

17

Dec. 2029 Amount equivalent to Hotel GOP–

Jan. 2025

Renewed(Increased)

15

Dec. 2029 Amount equivalent to Hotel GOP–

Jan. 2025

Renewed(Increased)

–

–

15

Sep. 2029 Amount equivalent to Hotel GOP–

Oct. 2024

Renewed(Increased)

–

–

15

Apr. 2029 Amount equivalent to Hotel GOP–

Apr. 2024

Renewed(Increased)––

AAPC Japan K.K.

22

Mercure Sapporo–

Management
contract

23

Mercure Okinawa Naha–Management
contract

24

Mercure Yokosuka

Fixedlease

Variable

AAPC Japan K.K.

5

Aug. 2028 Linked to Hotel GOP

The same rent will be applied
until expiration of the contract.

Sep. 2024

Renewed(Increased)

–

–

25

the b ikebukuro

Fixedlease

Fixed +
Variable

Ishin Ikebukuro Operations K.K.

5

Jul. 2029 JPY142MM/year + Linked to Hotel AGOP

The same rent will be applied
until expiration of the contract.

Aug. 2024

Renewed(Increased in fixed rent)

–

–

26

the b hachioji

Fixedlease

Fixed +
Variable

Ishin Hachioji Operations, Y.K.

5

Jul. 2029 JPY75MM/year + Linked to Hotel AGOP

The same rent will be applied
until expiration of the contract.

Aug. 2024

Renewed(Increased in fixed rent)

–

–

27

the b hakata

Fixedlease

Fixed +
Variable

Ishin Hakata Operations K.K.

5

Jul. 2029 JPY99MM/year + Linked to Hotel AGOP

The same rent will be applied
until expiration of the contract.

Aug. 2024

Renewed(Increased in fixed rent)

–

–

28

the b suidobashi

Fixedlease

Fixed +
Variable

Ishin Suidobashi Operations K.K.

7

Dec. 2026 JPY30MM/year + Linked to Hotel AGOP

The same rent will be applied
until expiration of the contract.

Oct. 2020

Fixed rent was changed(Reduction)

–

–

29

Hotel Francs

Fixedlease

Fixed +
Variable

K.K. BP

6

Dec. 2030

JPY25MM/month + when Hotel GOP exceeds
JPY350MM/year, the excess x 52% is paid

The same rent will be applied
until expiration of the contract.

Oct. 2024

Increased in fixed rent +Introduced variable rent

–

–

30

Oriental Hotel Okinawa
Resort & Spa

Fixedlease

Fixed +
Variable

Lagoon resort Nago Co., Ltd. (*)

10

Dec. 2030

JPY550MM/year + when Hotel AGOP exceeds
JPY655MM, the excess x 95% is paid

In principle, the same rent will
be applied until expiration of
the contract.

Jan. 2023

Modified structure

–

–

31

ACTIVE-INTER CITY HIROSHIMA(Sheraton Grand Hiroshima Hotel)

Fixedlease

Fixed +
Variable

Starwood Asia Pacific
K.K. A.I.C Hiroshima
Hotels & Resorts Pte.
Management (*)
Ltd.

11

Dec. 2026

JPY348MM/year + when Hotel AGOP exceeds
JPY360MM, the excess x 90% is paid

In principle, the same rent will
be applied until expiration of
the contract.

Jan. 2023

Modified Structure

–

–

32

CANDEO HOTELS Ueno Koen

Fixedlease

Fixed

Candeo Hospitality Management, Inc.

20

Feb. 2030 Nondisclosure(*4)

Rent can be modified throughmutual agreement every three
years.

Jul. 2016

Nondisclosure(*4)

–

–

33

Oriental Hotel Fukuoka
Hakata Station

Fixedlease

Fixed +
Variable

Hotel Centraza Co., Ltd. (*)

15

Dec. 2034

JPY425MM/year + when Hotel AGOP exceeds
JPY442MM, the excess x 98% is paid

In principle, the same rent will
be applied until expiration of
the contract.

Jan. 2023

Modified structure

–

–

34

Holiday Inn Osaka Namba

Fixedlease

Fixed +
VariableOW Hotel Operations KK (*)

15

Oct. 2031

JPY576MM/year + when Hotel AGOP exceeds
JPY580MM, the excess x 97% is paid

In principle, the same rent will
be applied until expiration of
the contract.

Jan. 2023

Modified structure

–

–

35

Hotel Oriental Express
Fukuoka Tenjin

Fixedlease

Fixed +
Variable

K.K Fukuoka Tenjin Operations (*)

10.5 Dec. 2031

JPY150MM/year + when Hotel AGOP exceeds
JPY165MM, the excess x 97% is paid

In principle, the same rent will
be applied until expiration of
the contract.

Jun. 2021

Change in lessee andModified structure

–

–

36

Hilton Nagoya

Japanese
Lease

Variable

Rent can be modified throughmutual agreement.

–

–

–

–

37

Hilton Tokyo Narita Airport

Fixedlease

Fixed +
Variable

38

International Garden Hotel Narita

Fixedlease

Fixed +
Variable

Nagoya Hilton Co.,Ltd.

Hilton International
Company

41

Dec. 2029 Nondisclosure(*4)

KK NaritaKosuge Operations (*)

20

Jun. 2037

JPY444MM/year + when Hotel AGOP exceeds
JPY450MM, the excess x 93% is paid

In principle, the same rent will
be applied until expiration of
the contract.

Jan. 2023

Modified structure––

KK NaritaYoshikura Operations (*)

10

Jun. 2027

JPY336MM/year + when Hotel AGOP exceeds
JPY360MM, the excess x 98% is paid

In principle, the same rent will
be applied until expiration of
the contract.

Jan. 2023

Modified structure

–

–

42

6. Summary of Lease Contracts (3/3)(as of the end of June 2024)
No.

Property Name

Lease
Type

Rent
Structure(*1)

Lessee(*2)

Hotel Operator/
Lease/ Expiration
Date of
Hotel Consulting andMCManagement Company Term Contract

Contractual Rent(*3)

Rent Modification Summary

Rent Modification Summary(After acquisition)

Rent Modification Schedule(2024 to 2025)

TimingCondition

2024

2025

Jan. 2023

Modified structure

–

–

39

Hotel Nikko Nara

Fixedlease

Fixed +
Variable

Hotel Management
Okura Nikko Hotel
Co., Ltd. (*)
Management Co., Ltd.

10

Dec. 2030

JPY420MM/year + when Hotel AGOP exceeds
JPY440MM, the excess x 95% is paid

In principle, the same rent will
be applied until expiration of
the contract.

40

Hotel Oriental Express
Osaka Shinsaibashi

Fixedlease

Fixed +
Variable

K.K. HOTEL ORIENTAL EXPRESS (*)

10Mar. 2028

JPY110.4MM/year + when Hotel AGOP exceeds
JPY128MM, the excess x 91% is paid

In principle, the same rent will
be applied until expiration of
the contract.

Jan. 2023

Modified structure

–

–

41

Hilton Tokyo Odaiba

Fixedlease

Fixed +
Variable

Tokyo Humania Enterprise Inc. (*)

11

Dec. 2029

JPY1,600MM/year + when Hotel AGOP exceeds
JPY1,660MM, the excess x 98% is paid

In principle, the same rent will
be applied until expiration of
the contract.

Jan. 2023

Modified structure

–

–

42

UAN kanazawa

Fixedlease

Fixed +
Revenuesharing

Solare Hotels andResorts Co., Ltd.

SHR Hotels Co., Ltd.

25

Oct. 2042

JPY9MM/month + when annual room sales
exceeds JPY270MM, the excess x 30% is paid

In principle, the same rent will
be applied until expiration of
the contract.

–

–

–

–

43

Sotetsu Fresa Inn
Shimbashi-Karasumoriguchi

Fixedlease

Fixed +
Revenuesharing

Sotetsu Hotel
Development
Co., Ltd.

Sotetsu HotelManagement CO., LTD.

3

Mar. 2026 JPY17MM/month + Revenue-sharing rent

The same rent will be applied
until expiration of the contract.

–

–

–

–

44

La’gent Stay Sapporo Odori

Fixedlease

Variable

AB Accommo. Co. Ltd.

3.6

Dec. 2027 Linked to Hotel GOP

The same rent will be applied
until expiration of the contract.

May 2024

Changed
calculation formula

–

–

45

Oriental Hotel Kyoto Rokujo

Fixedlease

Fixed +
Variable

Kyoto Horikawa Operations Co., Ltd. (*)

JPY14.25MM/month + when Hotel AGOP
14.2 Dec. 2033 exceeds JPY183MM/year, the excess x 93.5%
is paid

In principle, the same rent will
be applied until expiration of
the contract.

–

–

–

–

46

Hotel Oriental Express
Fukuoka Nakasukawabata

Fixedlease

Fixed +
Variable

Fukuoka Tenyamachi Operations Co., Ltd.
(*)

JPY14.5MM/month + when Hotel AGOP
12.7 Dec. 2033 exceeds JPY189MM/year, the excess x 92% is
paid

In principle, the same rent will
be applied until expiration of
the contract.

–

–

–

–

47

Hotel JAL City Kannai Yokohama

Fixedlease

Fixed +
Variable10

JPY11.25MM/month + when Hotel AGOP
Dec. 2033 exceeds JPY150MM/year, the excess x 95% is
paid

In principle, the same rent will
be applied until expiration of
the contract.

–

–

–

–

48

MIMARU Tokyo Shinjuku West(*5)

Fixedlease

Fixed +
Variable

Cosmos Initia Co., Ltd.

20

Feb. 2040

Fixed rent (Nondisclosure(*4)) +Variable rent (Linked to Hotel GOP)

Rent can be modified throughmutual agreement every five
years.

–––

Rent revision(Apr.)

49

HOTEL AMANEK
Shinjuku-Kabukicho. (*5)

Fixedlease

Fixed +
Variable

AMANEK Corporation

20

Mar. 2043

Fixed rent (Nondisclosure(*4)) +Variable rent (Linked to Hotel GOP)

Rent can be modified throughmutual agreement every five
years.

–

–

–

–

50

OKINAWA HARBORVIEW HOTEL(*5)

Fixedlease

Fixed +
Variable

THE HOTELIER GROUP NAHA K.K. (*)

19

Dec. 2034[until July 31, 2026] JPY87.5MM/month[on and after August 1, 2026]
JPY55MM/month + when Hotel AGOP exceeds
JPY720MM/year, the excess x 95% is paid

In principle, the same rent will
be applied until expiration of
the contract.

–

–

–

–

51

Southern Beach
Hotel & Resort OKINAWA (*5)

Fixedlease

Fixed +
Variable

Okinawa Hotel Management Co., Ltd.

10

Dec. 2025 JPY50MM/month + Linked to Hotel GOP

In principle, the same rent will
be applied until expiration of
the contract.

–

–

–

To be expired(Dec.)

K.K. Yokohama
Yamashita-cho
Operations (*)

Okura Nikko HotelManagement Co., Ltd.

(*1) Rent structure is as follows:
Fixed: Fixed rent
Variable: Variable rentManagement contract: Management contract
Fixed + Variable: Property paying both fixed and variable rent
Fixed + Revenue sharing: When the sales of the hotel exceed pre-determined amount, additional rent is paid(*2) The lessees marked with (*) are wholly owned subsidiaries of HMJ.
(*3) Amount including car park and CAM without tax.
(*4) The detailed content of the contract is not disclosed as consent on disclosure has not been obtained from the lessee.
(*5) Since those properties were acquired in July 2024, the summary of the lease contracts at acquisition is shown.

43

7. Balance Sheet(JPY MM)FY12/2023
End ofFiscal Year(as of) December 31,
2023

ASSETS
Current Assets(*1)

Cash and Deposits

Operating Accounts Receivables

FY12/2024
End ofFiscal Year
June 30,
2024

Variance

34,04925,754(8,295)28,515

21,594(6,921)

Operating Accounts Payable

4,850

3,254

(1,596)

Short-term Loans

LIABILITIESFY12/2023
End ofFiscal Year(as of) December 31,
2023

Current Liabilities

684

906

222

Current Portion of Investment Corporation Bond395,769

395,835

66

Current Portion of Long-term Loans Payable

Net Property and Equipment

360,081359,749(331)

Buildings in Trust(*2)

119,571

119,035(536)

Land in Trust

OthersNoncurrent Assets

44,585

19,445(25,139)

2,506

485

(2,021)

15,568ー(15,568)

3,000

3,000

ー

14,100(7,421)

Accounts Payable

1,130

1,036

(94)

Advances Received

764

770

6

237,641

237,641

ー

2,867

3,072

204

Intangible Assets

32,271

32,164(106)

Investment Corporation Bonds

3,416

3,921

504

Long-term Loans Payable

152

152

ー

Others

3,264

3,769

504

Derivative Liabilities

Deferred Assets

136

112

(23)

OthersLeasehold and Security Deposits

Variance

21,521Others(*3)
Other Assets

FY12/2024
End ofFiscal Year
June 30,
2024

OthersLong-term Liabilities

Tenant Leasehold and Security Deposits

94

53

(40)

140,390

163,543

23,15333,90033,900ー

101,242

124,231

22,989

4,780

4,818

38

1

ー

(1)

465

593

127

184,975

182,988(1,986)

199,051

199,051

ー

21,746

21,746ーReserve for Temporary Difference Adjustment

9,600

8,754

(845)

Reserve for Special Advanced Depreciation

1,174

1,174

ー

13,137

7,435(5,701)TOTAL LIABILITIESNET ASSETS
Unitholders' Capital
Capital Surplus

Unappropriated Retained Earnings
OthersTOTAL NET ASSETSTOTAL ASSETS

429,955

421,703(8,251)TOTAL LIABILITIES AND NET ASSETS(*1) Cash and deposits in trust is included.
(*2) The sum of buildings in trust, structures in trust, machinery and equipment in trust, tools, furniture and fixtures in trust, and construction in progress in trust.
(*3) The sum of machinery and equipment, tools, furniture and fixtures, and construction in progress.

44

270

550

280

244,980

238,714(6,265)429,955

421,703(8,251)

Appendix 3
Investors Composition and Investment Unit Price1. Major Unitholders and Classifications of Unitholders
Top 10 Major Unitholders
As of the end of June 2024

As of the end of December 2023
Name

Rank

1

No. of Units

%(*)

Rank

941,008

20.29

1

The Master Trust Bank of Japan, Ltd. (Trust)Name

No. of Units%(*)

837,524

18.06

Custody Bank of Japan, Ltd. (Trust)2

Custody Bank of Japan, Ltd. (Trust)

841,944

18.15

2

The Master Trust Bank of Japan, Ltd. (Trust)

822,909

17.74

3

The Nomura Trust and Banking Co., Ltd. (Investment Trust)

255,752

5.51

3

The Nomura Trust and Banking Co., Ltd. (Investment Trust)

240,391

5.18

4

BNYM AS AGT/CLTS 10 PERCENT

96,1152.07

4

BNYM AS AGT/CLTS 10 PERCENT

97,444

2.10

5SSBTC CLIENT OMNIBUS ACCOUNT

81,2051.75

5GOLDMAN SACHS INTERNATIONAL

89,657

1.93

6

STATE STREET BANK CLIENT - TREATY 505234

75,764

1.63

6

SSBTC CLIENT OMNIBUS ACCOUNT

85,178

1.83

7STATE STREET BANK AND TRUST COMPANY 505103

74,474

1.60

7

STATE STREET BANK CLIENT - TREATY 505234

77,217

1.66

8

JP MORGAN CHASE BANK 385781

63,0091.35

8JP MORGAN CHASE BANK 385781

64,9691.40

9GOLDMAN SACHS INTERNATIONAL

62,8401.35

9GOVERNMENT OF NORWAY

62,9101.35

57,473

1.23

10 STATE STREET BANK AND TRUST COMPANY 505103

61,4061.32

2,549,584

54.98

2,439,605

52.61

10 STATE STREET BANK AND TRUST COMPANY 505223
Total

Total

(*) Ownership ratio shows the total units held by each investor to the total units issued as of respective date (rounded down to two decimal places).

Classifications of Unitholders
As of the end of December 2023
OwnersNo. ofInvestors

No. ofUnits

Individuals & Others

25,727357,171

Financial Institutions(Incl. Securities Firms)

87

2,326,452

Other Domestic Firms

325

113,839

Foreign Firms &Individuals
Total

509

1,839,544

26,6484,637,006

No. of Investors

0.3%

1.2%
1.9%

As of the end of June 2024

No. of Units

7.7%

39.6%
50.1%
96.5%
Individuals &OthersOwnersNo. ofInvestors

No. ofUnits

Individuals & Others

24,963321,946

Financial Institutions(Incl. Securities Firms)

87

2,163,786

Other Domestic Firms

336

119,579

Foreign Firms &Individuals

529

2,031,695

25,915

4,637,006

Total

2.4%
Financial Institutions(Incl. Securities Firms)

Other Domestic
Firms

No. of Investors

0.3%

1.2%
2.0%

No. of Units

6.9%

43.8%

46.6%

96.3%
2.5%

Foreign Firms &Individuals(*) Percentage of investors is percentage of investors in each segment to the total number of investors in JHR, and percentage of investment units is percentage of investment units owned by each segment to the total investment units issued as ofrespective date (both rounded down to one decimal place).

46

2. Changes in Investment Unit Price and Market Capitalization
Changes in the investment unit priceand market capitalization(Based on the closing price)
Price of the investment unit:

Jun. 2015(JPY)

JPY76,800

120,000

JPY391.4Bn

100,000

Total market capitalization:(based on the closing price of July 31, 2024)(*1) Price of the real estate investment securities
may fall depending on the fluctuations of priceof the real estate under management or
profitability, etc., and investors may suffer
losses. Investors may also suffer losses
through the bankruptcy or deteriorated
financial condition of the issuer. For the risks
of investing in JHR's investment securities,
please refer to JHR's securities report dated
March 21, 2024 and the securities registration
statement dated June 24, 2024.
(*2) Including OA

Jul. 2016

Jun. 2017

80,00060,000Sep. 2014
PO JPY10.1Bn

Jan. 2015
PO(*2) JPY15.6Bn

Jan. 2016
PO(*2) JPY14.6Bn

Mar. 2021
TPA(*3) JPY0.3Bn

Apr. 2013
PO JPY20.5Bn(*) JHR unit price, TSE REIT index and TOPIX are
indexed to the closing price on April 2, 2012,
which equals the base value of 100. REIT
Index of TSE is an index of a weighted
average of the market capitalization of all
REITs listed on TSE.

Jul. 2024
PO(*2) JPY33.6Bn(JPY MM)

Sep. 2023
PO JPY11.8Bn

450,000

300,000

Sep. 2012
PO(*2) JPY5.0Bn
150,000

40,00020,00000(*3) Indicate the third-party allotment conducted
March 2021, with sponsor group as allottee.

Comparison withREIT Index and TOPIX of
Tokyo Stock Exchange(TSE)

Jan. 2019Market Capitalization
PO(*2) JPY10.7Bn PO(*2) JPY34.7Bn PO(*2) JPY18.6Bn PO(*2) JPY33.3Bn
Investment Unit Price of JHR

600

Investment Unit Price of JHR

TSE REIT Index

500

400

300

200

100

0

47

TOPIX

Appendix 4
Summary of the Asset Management Company

1. Summary of the Asset Management Company(as of August 22, 2024)
Company NameJapan Hotel REIT Advisors Co., Ltd.

Location

Ebisu Neonato 4F, 4-1-18 Ebisu, Shibuya-ku, Tokyo 150-0013

Establishment

August 10, 2004

Capital

JPY300MM

Shareholders

SCJ One (S) Pte. Ltd., Kyoritsu Maintenance Co., Ltd., ORIX Corporation

Representative Director

Hiroyuki Aoki
Real Estate Broker, Governor of Tokyo (4) No. 83613
Discretionary Transaction Agent by Minister of Land, Infrastructure, Transport and Tourism No. 38

Registration and Licenses

Financial Instruments Business Operator, Director-General of Kanto Local Finance Bureau No. 334
Member of The Investment Trusts Association, Japan
Member of The Japan Investment Advisers Association<Organization Chart>

Shareholders Meeting
AuditorBoard of Directors

Investment and Operation
Committee

Compliance Committee
President & CEO
Compliance Office
Personnel &Administration Group

Business Promotion OfficeFinance and Planning Division

Investment Division
Acquisitions Group

Public REIT Group

Private FundGroup 1

Private FundGroup 2

49

Planning Group

Finance GroupAccounting Group2. Features and Governance of the Asset Management Company
Mission Statement

Code of Conduct
We define "Challenge" and "Teamwork" as the code of conduct for a teammember at JHRA.
In achieving our mission, "connect hotels, people and future," it is essential
to pursue all possibilities and continue exploring to create added value.

We explore the possibility of hotels.

We will always pursue possibilities through "challenge" by each department
and each employee and continue to create added value throughcooperation and collaboration based on "teamwork."

We create new value and lead hotels to a bright future.
We will be the pivot to connect people with various perspectives
and a pioneer for the future of hotel industry.

Challenge

We connect hotels, people, and a bright future.

 Be a self-starter, take initiative and demonstrate
drive Set high goal and strive to achieve goals

Ideas behind the new mission statement•

Through offering opportunities to invest in hotels, we will deliver
attractiveness of hotels to many people.

•

Utilizing our unique asset management know-how and skills,
we will create new value and contribute to the development of
the hotel industry.

•

We will enhance sustainability of hotels and contribute torealizing a society that is friendly to people, local community andenvironment.

•

We will earn trust of a wide range of various stakeholders
involved in the hotel and become the pivot to bring thestakeholders into harmony.

•

We will challenge the status quo, consider all the possibilities fora better solution and become a bridge to the bright future for the
hotels and people.

 Respect creativity and innovation
 Promote challenge, free from fear of failure

Teamwork Respect teamwork and collaborate with team-mates Respect others. Respect values and opinions of others
 Promote "sharing" (idea, knowledge, information,goal, achievement, joy of achievement, lesson, etc.)
 Make effort for open, frank and sincere
communication502. Features and Governance of the Asset Management Company (cont.)
Advanced Expertise Ability to propose transaction schemes, execute transactions, and plan and execute unprecedented measures of asset
management based on an in-depth understanding of hotel operations and a track record of such asset management.
 Extensive experience in renovation and rebranding through collaboration with many hotel lessees and operators.
 Strong and long-term relationships with a large number of hotel lessees and hotel operators.
 High analytical skills and accurate judgment capacity based on rich information and data obtained through a broad networkand high credibility.

Ensured Independence There is no seconded employee from sponsor in JHRA.
 JHRA's Board of Directors of the Asset Management Company comprises a total of six directors: four directors (including one
part-time director) unaffiliated with the sponsor, two part-time directors affiliated with the sponsor, and one part-time
auditor unaffiliated with the sponsor. This structure ensures a highly independent management, a key characteristic of JHRA.
 We established a more rigorous decision-making process for transactions with sponsor-related parties. In principle, JHRA
undergoes deliberations and resolutions by the Investment and Operation Committee, the Compliance Committee which
includes an outside specialist authorized to dismiss proposals, and the Board of Directors Meeting of JHRA.
In addition, in cases where JHR conducts transactions with sponsor-related parties, such transactions shall be conductedupon the approval and resolution by the Board of Directors Meeting at JHR. The officers of JHR are all third parties unrelated
to the sponsor-related parties.
 Since our main sponsor, SC Capital Partners Group is also an independent asset management company, it fully understands
and respects the importance of JHRA's independency. JHRA conducts asset management business based upon its judgment.

51

Disclaimer
This material is prepared and provided solely for the purpose of providing information of Japan Hotel REIT Advisors Co., Ltd ("JHRA") and not to offer, solicit, or do
business, etc. with specific financial instruments including purchase of investment units, or investment corporation bonds of Japan Hotel REIT Investment Corporation("JHR") or any other financial instruments to invest in private funds. Investors are asked to ensure that they make decisions on investment at their own discretion. If any
discrepancy is identified between this translation and the Japanese original, the Japanese original shall prevail.
This material is neither a disclosure document nor an investment report required under or prepared pursuant to the Financial Instruments and Exchange Act, Act on
Investment Trusts and Investment Corporations, Act on Provision of Financial Services and related government ordinances, cabinet office regulations, listing rules by
Tokyo Stock Exchange, regulations of The Investment Trusts Association, Japan, regulations of the Japan Investment Advisers Association or other related rules andregulations.
The statements of JHR and private funds in this material are based on the judgment, evaluation and forecast of JHRA. This material contains forward-looking statements
about financial conditions, operational results, and businesses of JHR, private funds and JHRA, as well as plans and intentions of JHR, private funds and JHRA. Suchforward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results or performance of JHR, private funds and
JHRA to materially differ from those expressed or implied forecasts. Those forecasts are made based on present and future business strategies and assumptions relating
to the political, economic and other circumstances surrounding JHR, private funds and JHRA in the future.
Every effort has been made to ensure the accuracy of the information contained in this material. However, there can be no assurance that the information is accurate,complete, appropriate or fair. The information may be revised or retracted without prior notice.
Regarding the offering and trading of investment units, investment corporation bonds or any form of financial instruments to invest in private funds, financial institutions
may charge you pre-determined handling fees and other charges aside from the price of the investment units, investment corporation bonds or any form of financial
product to invest in private funds. JHRA does not handle the offering and trading of investment units, investment corporation bonds or any form of financial instruments
to invest in private funds.
JHR and private funds managed or advised by JHRA mainly invests in real estate-related assets, primarily hotels which are subject to change in values. Therefore,
holders of investment units, investment corporation bonds or investors of any form of financial instruments to invest in private funds may suffer losses due to economic
conditions including real estate market, securities market, economic situations including interest rate environment, the nature of investment units investment corporation
bonds or any financial instruments to invest in private funds, dependency on mechanisms and related persons of investment corporations or investment vehicle ofprivate funds, changes in legal systems related to real estate (include tax regulations, building regulations and others), damage caused to the real estate-related assets
by natural disasters, fluctuation in prices or profitability of the real estate-related assets, nature of the financial instrument under management, delisting of theinvestment units, or worsening financial position or insolvency.
The contents of this material may not be copied or reproduced without our prior permission.
Japan Hotel REIT Advisors Co., Ltd.
Financial Instruments Trading Company
Director-General of Kanto Local Finance Bureau No. 334
Member of The Investment Trust Association, Japan
Member of The Japan Investment Advisers Association

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Memo

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