Make The World
More Sustainable[Provisional Translation Only]
This English translation of the original Japanese document is provided solely for information purposes.
Should there be any discrepancies between this translation and the Japanese original, the latter shall prevail.

July 21, 2023
IssuerIchigo Hotel REIT Investment Corporation (“Ichigo Hotel,” 3463)
1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo
Representative: Eriko Ishii, Executive Director
www.ichigo-hotel.co.jp/en
Asset Management Company
Ichigo Investment Advisors Co., Ltd.
Representative: Hiroshi Iwai, President
Inquiries: Hidehito Iwasaka, Head of Ichigo Hotel
Tel: +81-3-3502-4892
Earnings Forecast Revisions for the July 2023 and January 2024 Fiscal Periods
Ichigo Hotel is revising upward its earnings forecasts for the July 2023 and January 2024
fiscal periods announced in the March 30, 2023 release “Correction: January 2023 Fiscal
Period Earnings.”
1. July 2023 Earnings Forecast Revision(JPY million)

Previous Forecast(A)
New Forecast(B)
Difference(B) - (A)% Change
Reference:
July 2022 ActualNet
IncomeDividendper Share(JPY)

OperatingRevenue

Operating
ProfitRecurring
Profit1,400655402401

1,576

1,796

933

725

724

2,841

+395+277+322+322+1,265+28.3%+42.3%+80.1%+80.3%+80.3%

1,248

566362361

1,418

Reference: Net Income per Share: JPY 2,841
Period-end number of shares outstanding: 254,974 shares
Note: The new forecast is based on the “Preconditions for the July 2023 Earnings
Forecast” on page 4. Actual results may vary due to changes in circumstances, so these
forecasts should not be construed as a guarantee of such results. Ichigo Hotel will makea forecast revision should a material discrepancy emerge between this forecast andresults.

12. January 2024 Earnings Forecast Revision(JPY million)
Operating
ProfitRecurring
Profit1,559

782495494

1,938

1,665816544

543

2,134+106+33+49+49+196% Change+6.8%+4.3%+10.0%+10.0%+10.1%

Reference:
January 2023

1,537

781

572

571

2,240

Previous Forecast(A)
New Forecast(B)
Difference(B) - (A)Net
IncomeDividendper Share(JPY)

OperatingRevenue

Reference: Net Income per Share: JPY 2,133
Period-end number of shares outstanding: 254,974 shares
Note: The new forecast is based on the “Preconditions for the January 2024 EarningsForecast” on page 7. Actual results may vary due to changes in circumstances, so theseforecasts should not be construed as a guarantee of such results. Ichigo Hotel will make aforecast revision should a material discrepancy emerge between this forecast and results.
3. July 2023 and January 2024 Earnings Forecast Revision Rationale
I. July 2023 Fiscal Period
Ichigo Hotel is revising upward its July 2023 earnings forecast due to an expected
recovery in domestic leisure and business demand supported by the Japanese
government’s domestic travel subsidy program, as well as continued recovery in inboundtourism mainly in Tokyo, Osaka, and Fukuoka due to the lifting of Japanese restrictions
on inbound travel.
Furthermore, ADR and RevPAR for variable-rent hotels have recovered to pre-Covid
2019 levels, as shown in the table below, with variable rent exceeding and expected tocontinue to exceed the forecast announced on March 30, 2023.
As a result, July 2023 operating revenue, operating profit, recurring profit, net income,and divided per share increased by JPY 395 million (+28.3%), JPY 277 million (+42.3%),
JPY 322 million (+80.1%), JPY 322 million (+80.3%), and JPY 1,265 (+80.3%),
respectively, versus the forecast announced on March 30, 2023.
Variable-Rent Hotel Revenue, RevPAR, Occupancy, & ADR (2019-2023)
Feb – May Feb – May Feb – May Feb – May Feb – May
20192020
2021
2022
2023
No. Of Variable-Rent
Hotels
Revenue (JPY M)
RevPAR (JPY)
Occupancy (%)
ADR (JPY)

13111415

16

2,276.0
7,991
90.6
8,819

532.5
2,67550.4
5,305

697.8
2,72962.64,362

1,255.0
4,137
84.0
4,926

2,136.2
7,004
84.2
8,3152

II. January 2024 Fiscal Period
Ichigo Hotel is revising upward its January 2024 fiscal period earnings forecast due tocontinued recovery in domestic leisure and business demand and robust inbound demandmainly in Tokyo, Osaka, and Fukuoka, with variable rent expected to exceed the forecast
announced on March 30, 2023.
As a result, January 2024 operating revenue, operating profit, recurring profit, net
income, and divided per share increased by JPY 106 million (+6.8%), JPY 33 million(+4.3%), JPY 49 million (+10.0%), JPY 49 million (+10.0%), and JPY 196 (+10.1%),
respectively, versus the forecast announced on March 30, 2023.

3

Preconditions for the July 2023 Earnings Forecast
Preconditions
PeriodNumber ofHotels

 February 1, 2023 to July 31, 2023 (181 days)
 25 hotels as of the date of this report The forecast assumes no further acquisitions or sales through July 31, 2023.
 The number of assets may change due to acquisitions or sales made during theperiod.
Within operating revenue, rental income is forecast based on current lease contracts,
taking into consideration such factors as hotel and market conditions.1
Forecast Operating Performance for the 17 variable rent hotels2

3Occupancy
ADR4July 2023 Fiscal Period
83.2%
JPY 8,393

1

OperatingRevenue

The forecast rental income assumes operators and tenants will fully pay theircontractual rents without delay or default.
2The 17 variable rent hotels are: Smile Hotel Kyoto Shijo, Hotel Wing InternationalNagoya, Nest Hotel Sapporo Ekimae, The OneFive Osaka Sakaisuji, Hotel Wing
International Kobe Shin Nagata Ekimae, Nest Hotel Sapporo Odori, The OneFive
Fukuoka Tenjin, Nest Hotel Osaka Shinsaibashi, Smile Hotel Tokyo Asagaya, NestHotel Matsuyama, The OneFive Okayama, Capsule Plus Yokohama, The OneFive
Garden Kurashiki, Nest Hotel Kumamoto, Valie Hotel Hiroshima, The OneFive
Tokyo Shibuya, and Smile Hotel Nagano. Data for Capsule Plus Yokohama isexcluded from the above forecast because the operator did not give consent todisclose forecasts.
3
Occupancy is calculated with the following formula:
Occupancy = Total number of guest rooms occupied during the period / (totalnumber of guest rooms * number of days hotel was in operation during the period)
4
ADR or Average Daily Rate is calculated with the following formula:
ADR = Total sales from accommodation (excluding restaurant charges and otherservice fees) / number of guest rooms occupied during the period

4Details of the July 2023 Rental Income Forecast by Hotel(JPY million)
Fixed Rent/
Minimum Variable
Hotel Name
Guaranteed
Rent
Rent
Smile Hotel Kyoto Shijo
30
20
Nest Hotel Sapporo Ekimae
3197
The OneFive Osaka Sakaisuji
1148
Comfort Hotel Hamamatsu55–
Nest Hotel Sapporo Odori
27
51
The OneFive Fukuoka Tenjin
34
39
Nest Hotel Osaka Shinsaibashi
66
82
Comfort Hotel Central International Airport
151–
Smile Hotel Tokyo Asagaya
61
77
Nest Hotel Matsuyama
36
26
The OneFive Okayama
62
26
Comfort Hotel Kushiro
18–
Comfort Hotel Suzuka
15–
The OneFive Garden Kurashiki
1022
Nest Hotel Kumamoto
25
43
Valie Hotel Hiroshima
1773
The OneFive Tokyo Shibuya
47
71
Hotel Sunshine Utsunomiya
57
–
1
Other
220
85
Total
981
768

OperatingRevenue

1Total
50
128
60
55
78
73
148
151
139
62
89
181533
6891
11957
306
1,749

Figures for Hotel Wing International Nagoya, Hotel Wing International Kobe
Shin Nagata Ekimae, Hotel Livemax Nihombashi-Hakozaki, Capsule PlusYokohama, Urbain Hiroshima Executive, Washington Hotel Plaza Shimonoseki
Eki Nishi, and Smile Hotel Nagano are included in “Other” because the hotel
operators did not provide consent to disclose hotel-specific data.
 Retail: JPY 29 million of rental income from retail tenants at The OneFive Osaka
Sakaisuji, Hotel Wing International Kobe Shin Nagata Ekimae, Smile HotelTokyo Asagaya, and Hotel Sunshine Utsunomiya.

5OperatingExpenses

 Rental expenses (excluding depreciation), Ichigo Hotel’s principal operating
expense, are calculated based on historical data for currently owned hotels, andbased on historical data adjusted for anticipated expense variations.
 Depreciation: JPY 387 million. Depreciation has been calculated using thestraight-line method.
 Property and city planning taxes: JPY 127 million.
 Building maintenance and repair expenses are based on what Ichigo Investment
Advisors, the asset management company of Ichigo Hotel, estimates will benecessary for each hotel during the period. However, actual expenses for theperiod could differ significantly from these forecast amounts for reasons including
the variability of maintenance and repair expenses, one-time costs due to
unexpected building damage, etc.
 Actual operating expenses may differ significantly from these assumptions due tounforeseeable factors.
 SG&A expenses: JPY 0.7 million for environmental certification costs.

Non-OperatingExpenses

 Interest expenses and other borrowing-related expenses: JPY 201 million
 Amortization of bond issuance expenses: JPY 7 millionBorrowings

 Total borrowings: JPY 25.47 billion as of July 31, 2023

Number ofShares 254,974 shares issued and outstanding as of the date of this report The forecast assumes there will be no additional new shares issued through July31, 2023.

Dividend The dividend forecast assumes that dividends will comply with the dividend
distribution policy stipulated in Ichigo Hotel’s Articles of Incorporation.
 The dividend is subject to change due to factors such as sales of portfolio assets,changes in rental income associated with operator turnover, the occurrence of
unexpected maintenance and repair costs, and fluctuations in interest rates.

Dividend in
Excess ofEarnings

 Ichigo Hotel does not plan on paying any Dividend in Excess of Earnings.

Other This forecast assumes that there are no material revisions to laws and regulations,the tax system, accounting standards, listing rules of the Tokyo Stock Exchange,
and rules of the Investment Trusts Association, Japan, and no material changes inthe state of the economy and real estate market conditions.

6Preconditions for the January 2024 Earnings Forecast
Preconditions
PeriodNumber ofHotels

 August 1, 2023 to January 31, 2024 (184 days)
 25 hotels as of the date of this report The forecast assumes no further acquisitions or sales through January 31, 2024.
 The number of assets may change due to acquisitions or sales made during theperiod.
Within operating revenue, rental income is forecast based on current lease contracts,
taking into consideration such factors as hotel and market conditions.1
Forecast Operating Performance for the 17 variable rent hotels2

3

Occupancy
ADR4

January 2024 Fiscal Period
83.4%
JPY 7,681

1

OperatingRevenue

The forecast rental income assumes operators and tenants will fully pay theircontractual rents without delay or default.
2The 17 variable rent hotels are: Smile Hotel Kyoto Shijo, Hotel Wing InternationalNagoya, Nest Hotel Sapporo Ekimae, The OneFive Osaka Sakaisuji, Hotel Wing
International Kobe Shin Nagata Ekimae, Nest Hotel Sapporo Odori, The OneFive
Fukuoka Tenjin, Nest Hotel Osaka Shinsaibashi, Smile Hotel Tokyo Asagaya, NestHotel Matsuyama, The OneFive Okayama, Capsule Plus Yokohama, The OneFive
Garden Kurashiki, Nest Hotel Kumamoto, Valie Hotel Hiroshima, The OneFive
Tokyo Shibuya, and Smile Hotel Nagano. Data for Capsule Plus Yokohama isexcluded from the above forecast because the operator did not give consent todisclose forecasts.
3
Occupancy is calculated with the following formula:
Occupancy = Total number of guest rooms occupied during the period / (total
number of guest rooms * number of days hotel was in operation during the period)
4
ADR or Average Daily Rate is calculated with the following formula:
ADR = Total sales from accommodation (excluding restaurant charges and otherservice fees) / number of guest rooms occupied during the period7

Details of the January 2024 Rental Income Forecast by Hotel(JPY million)
Fixed Rent/
Minimum Variable
Hotel Name
Guaranteed
Rent
Rent
Smile Hotel Kyoto Shijo
34
13
Nest Hotel Sapporo Ekimae
32
66
The OneFive Osaka Sakaisuji
1718
Comfort Hotel Hamamatsu
55–
Nest Hotel Sapporo Odori
2651
The OneFive Fukuoka Tenjin
40
25
Nest Hotel Osaka Shinsaibashi
65
66
Comfort Hotel Central International Airport
151–
Smile Hotel Tokyo Asagaya
59
33
Nest Hotel Matsuyama
35
43
The OneFive Okayama
72
8Comfort Hotel Kushiro
18–
Comfort Hotel Suzuka
15–
The OneFive Garden Kurashiki
2282
Nest Hotel Kumamoto
2746
Valie Hotel Hiroshima
2222
The OneFive Tokyo Shibuya
4428
Hotel Sunshine Utsunomiya
57–1Other
222
89
Total
1,022
597

Operating
Revenue

1Total
48
99
35
55
77
66
131
151
93
79
80
1815
105
74
44
73
57
311
1,619

Figures for Hotel Wing International Nagoya, Hotel Wing International Kobe
Shin Nagata Ekimae, Hotel Livemax Nihombashi-Hakozaki, Capsule Plus
Yokohama, Urbain Hiroshima Executive, Washington Hotel Plaza Shimonoseki
Eki Nishi, and Smile Hotel Nagano are included in “Other” because the hotel
operators did not provide consent to disclose hotel-specific data.
 Retail: JPY 29 million of rental income from retail tenants at The OneFive Osaka
Sakaisuji, Hotel Wing International Kobe Shin Nagata Ekimae, Smile HotelTokyo Asagaya, and Hotel Sunshine Utsunomiya.

8OperatingExpenses

 Rental expenses (excluding depreciation), Ichigo Hotel’s principal operating
expense, are calculated based on historical data for currently owned hotels, andbased on historical data adjusted for anticipated expense variations.
 Depreciation: JPY 406 million. Depreciation has been calculated using thestraight-line method.
 Property and city planning taxes: JPY 126 million.
 Building maintenance and repair expenses are based on what Ichigo Investment
Advisors, the asset management company of Ichigo Hotel, estimates will benecessary for each hotel during the period. However, actual expenses for theperiod could differ significantly from these forecast amounts for reasons including
the variability of maintenance and repair expenses, one-time costs due tounexpected building damage, etc.
 Actual operating expenses may differ significantly from these assumptions due tounforeseeable factors.
 SG&A expenses: JPY 2 million for engineering report and JPY 2 million for
expenses relating to environmental initiatives.

Non-OperatingExpenses

 Interest expenses and other borrowing-related expenses: JPY 271 million

Borrowings

 Total borrowings: JPY 25.47 billion as of January 31, 2024, based on theassumption that JPY 4.5 billion of long-term borrowing due August 31, 2023, JPY
7 billion of short-term borrowing due November 30, 2023, and JPY 1.8 billion ofshort-term borrowing due January 31, 2024 will be refinanced.

Number ofShares 254,974 shares issued and outstanding as of the date of this report The forecast assumes there will be no additional new shares issued throughJanuary 31, 2024.

Dividend The dividend forecast assumes that dividends will comply with the dividend
distribution policy stipulated in Ichigo Hotel’s Articles of Incorporation.
 The dividend is subject to change due to factors such as sales of portfolio assets,changes in rental income associated with operator turnover, the occurrence of
unexpected maintenance and repair costs, and fluctuations in interest rates.

Dividend in
Excess ofEarnings

 Ichigo Hotel does not plan on paying any Dividend in Excess of Earnings.

Other This forecast assumes that there are no material revisions to laws and regulations,the tax system, accounting standards, listing rules of the Tokyo Stock Exchange,
and rules of the Investment Trusts Association, Japan, and no material changes inthe state of the economy and real estate market conditions.

9