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.

March 16, 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
January 2023 Fiscal Period Earnings Results Versus Forecastand Earnings Forecast Revision for the July 2023 Fiscal Period
Because Ichigo Hotel’s January 2023 earnings results announced today differed from its
forecast in the December 22, 2022 release, “Earnings Forecast Revision for the January2023 Fiscal Period,” Ichigo Hotel is detailing the difference between the results and theforecast below.
Ichigo Hotel is revising upward its July 2023 fiscal period earnings forecast announced inthe September 14, 2022 release “July 2022 Fiscal Period Earnings.”
1. January 2023 Earnings Results vs. Forecast(JPY million)
Dividendper Share(JPY)

OperatingRevenue

Operating
ProfitRecurring
ProfitForecast (A)

1,323

597

374

373

1,465

Results (B)

1,562

799

590

589

2,311

Difference(B) - (A)+239+201+215+215+846% Change+18.1%+33.8%+57.6%+57.7%+57.7%

Reference:
January 2022

1,125472

274

342

1,345

Net
IncomeReference: Net Income per Share: JPY 2,311
Period-end number of shares outstanding: 254,974 shares
Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the earnings results
for the January 2023 fiscal period and revisions to the earnings forecast for the July 2023 fiscal period, and is not an offer to sellor a solicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should bemade based upon your own judgment. The Ichigo Hotel shares may not be offered or sold in the United States without registrationor an exemption from registration under the United States Securities Act of 1933, as amended (the “Securities Act”). Ichigo
Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not beregistered under the Securities Act.

12. July 2023 Earnings Forecast Revision(JPY million)
OperatingProfit

Recurring
Profit

1,326

603

352

351

1,380

1,699

855

564

563

1,532

+373

+252+210+212+152% Change+28.1%+41.8%+60.1%+59.9%+11.0%

Reference:
July 2022

1,248

566

362

361

1,418

Previous Forecast(A)
New Forecast(B)
Difference(B) - (A)NetIncomeDividendper Share(JPY)

OperatingRevenue

Reference: Net Income per Share: JPY 1,532
Period-end number of shares outstanding: 367,974 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 such as the sale or acquisition ofadditional assets in the future, changes in rental income due to factors such as changes oflessees, changes in the operating environment such as unexpected repairs, changes ininterest rates, the number of shares to be issued and issue price, and issuance of new sharesin the future. Therefore, these forecasts should not be construed as a guarantee of such
results. Ichigo Hotel will make a forecast revision should a material discrepancy emerge
between this forecast and results.
The amounts shown above are rounded down to the nearest unit, and percentages arerounded to the first decimal place.
3. January 2023 Earnings Results and July 2023 Earnings Forecast Revision Rationale
January 2023 Earnings Results
Ichigo Hotel saw a significant increase in inbound demand during the January 2023 fiscal
period due to a recovery in domestic tourism from a domestic travel subsidy program by
the Japanese government, as well as a significant recovery in inbound tourism demand
due to the lifting of overseas travel restrictions.
Furthermore, variable rent exceeded forecasts due to Hiroshima, Aichi, and Kumamoto
Prefectures continuing to lease all rooms of the Valie Hotel Hiroshima (from February2021), Hotel Wing International Nagoya (from January 2022), and Nest Hotel Kumamoto(from February 2022), respectively.
As a result, January 2023 operating revenue, operating profit, recurring profit, net
income, and divided per share increased by JPY 239 million (+18.1%), JPY 201 million(+33.8%), JPY 215 million (+57.6%), JPY 215 million (+57.7%), and JPY 846 (+57.7%),
respectively, versus the forecast announced on December 22, 2022.
Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the earnings results
for the January 2023 fiscal period and revisions to the earnings forecast for the July 2023 fiscal period, and is not an offer to sellor a solicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should bemade based upon your own judgment. The Ichigo Hotel shares may not be offered or sold in the United States without registrationor an exemption from registration under the United States Securities Act of 1933, as amended (the “Securities Act”). Ichigo
Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not beregistered under the Securities Act.

2

Out of dividend per share of JPY 2,311, the impact of leasing all rooms is JPY 1,015.
July 2023 Earnings Forecast Revision Rationale
Ichigo Hotel is revising its July 2023 fiscal period earnings forecast to reflect changes tothe preconditions announced in the September 14, 2022 release, “July 2022 Fiscal PeriodEarnings” resulting from the new share issuance and acquisition of five hotel assets
announced in today’s releases “Issuance of New Shares and Secondary Share Offering,”“Acquisition of Five Hotel Assets,” and “New Loan.”
Although Ichigo Hotel is acquiring the five hotel assets using proceeds from the newshare issuance and a syndicated loan, the July 2023 fiscal period-end LTV is forecast at
39.0% (vs. July 2022-end: 42.9%, January 2023-end: 42.6%). Ichigo Hotel expects
further dividend growth via dynamic external growth by leveraging its borrowing
capacity.
The January 2024 fiscal period earnings forecast, including preconditions, is presented intoday’s release “January 2023 Fiscal Period Earnings.”

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the earnings results
for the January 2023 fiscal period and revisions to the earnings forecast for the July 2023 fiscal period, and is not an offer to sellor a solicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should bemade based upon your own judgment. The Ichigo Hotel shares may not be offered or sold in the United States without registrationor an exemption from registration under the United States Securities Act of 1933, as amended (the “Securities Act”). Ichigo
Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not beregistered under the Securities Act.

3

Preconditions for the July 2023 Earnings Forecast
Preconditions
PeriodNumber ofHotels

Number ofShares February 1, 2023 to July 31, 2023 (181 days) 30 hotels (25 hotels as of today and five hotels to be acquired using proceeds fromthe new share issuance, a new loan, and cash-on-hand) 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.
 Total 367,974 shares (254,974 shares outstanding, 107,620 new shares issued via
the public offering, and 5,380 new shares, the maximum number of shares issued
via the over-allotment secondary share offering) The forecast assumes there will be no additional new shares issued through July
31, 2023
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 22 variable rent hotels2

3

Occupancy
ADR4

July 2023 Fiscal Period
81.2%
JPY 6,847

1OperatingRevenue

The forecast rental income assumes operators and tenants will fully pay theircontractual rents without delay or default.
2The 22 variable rent hotels are: Smile Hotel Kyoto Shijo, Nest Hotel Sapporo
Ekimae, The OneFive Osaka Sakaisuji, Nest Hotel Sapporo Odori, The OneFive
Fukuoka Tenjin, Nest Hotel Osaka Shinsaibashi, Smile Hotel Tokyo Asagaya, Nest
Hotel Matsuyama, The OneFive Garden Kurashiki, Hotel Wing International
Nagoya, Hotel Wing International Kobe Shin Nagata Ekimae, Nest Hotel
Kumamoto, Valie Hotel Hiroshima, The OneFive Tokyo Shibuya, The OneFive
Okayama, Smile Hotel Nagano, Comfort Hotel Osaka Shinsaibashi, HOTEL THE
KNOT YOKOKAMA, Quintessa Hotel Ise Shima, Quintessa Hotel Ogaki, THE
KNOT SAPPORO, and Capsule Plus Yokohama. Data for Capsule PlusYokohama is excluded from the above forecast because the operator did not giveconsent to disclose 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 period

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the earnings results
for the January 2023 fiscal period and revisions to the earnings forecast for the July 2023 fiscal period, and is not an offer to sellor a solicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should bemade based upon your own judgment. The Ichigo Hotel shares may not be offered or sold in the United States without registrationor an exemption from registration under the United States Securities Act of 1933, as amended (the “Securities Act”). Ichigo
Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not beregistered under the Securities Act.

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Details of the July 2023 Rental Income Forecast by Hotel(JPY million)
Fixed Rent/
Minimum Variable
Hotel Name
GuaranteedRentRent
Smile Hotel Kyoto Shijo
30–
Nest Hotel Sapporo Ekimae
31
61
The OneFive Osaka Sakaisuji1111
Comfort Hotel Hamamatsu
55–
Nest Hotel Sapporo Odori
2742
The OneFive Fukuoka Tenjin
34
9
Nest Hotel Osaka Shinsaibashi
66
16
Comfort Hotel Central International Airport
151–
Smile Hotel Tokyo Asagaya
61
26
Nest Hotel Matsuyama
36
37
The OneFive Okayama
61–
Comfort Hotel Kushiro
18–
Comfort Hotel Suzuka
15–
The OneFive Garden Kurashiki
923
Nest Hotel Kumamoto
25
23
Valie Hotel Hiroshima
1256
The OneFive Tokyo Shibuya
47
17
Hotel Sunshine Utsunomiya
57–
Comfort Hotel Osaka Shinsaibashi
44–
HOTEL THE KNOT YOKOHAMA
4250
Quintessa Hotel Ise Shima
139Quintessa Hotel Ogaki
10–THE KNOT SAPPORO
42381
Other21958
Total
1,126483

OperatingRevenueTotal

13092
2355
694382151
87
7462
18153348
6965574492
221080277
1,609

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 55 million of rental income from retail tenants at The OneFive Osaka
Sakaisuji, Hotel Wing International Kobe Shin Nagata Ekimae, Smile HotelTokyo Asagaya, Hotel Sunshine Utsunomiya, Comfort Hotel Osaka Shinsaibashi,
HOTEL THE KNOT YOKOHAMA, and THE KNOT SAPPORO.
Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the earnings results
for the January 2023 fiscal period and revisions to the earnings forecast for the July 2023 fiscal period, and is not an offer to sellor a solicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should bemade based upon your own judgment. The Ichigo Hotel shares may not be offered or sold in the United States without registrationor an exemption from registration under the United States Securities Act of 1933, as amended (the “Securities Act”). Ichigo
Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not beregistered under the Securities Act.

5OperatingExpenses Rental expenses (excluding depreciation), Ichigo Hotel REIT’s principal operating
expense, are calculated based on historical data for currently-owned hotels, andbased on historical data adjusted for anticipated expense variations andinformation provided by the current owners for hotels to be acquired.
 Depreciation: JPY 428 million. Depreciation has been calculated using thestraight-line method.
 Property and city planning taxes: JPY 127 million. Property and city planningtaxes for hotels to be acquired will be recorded from the July 2024 fiscal period.
 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 2.5 million for engineering report and environmental
certification costs.

Non-OperatingExpenses

 New share issuance and public offering-related expenses: JPY 1 million. Expenses
for the new share issuance and public offering will be amortized over 36 months
using the straight-line method.
 Interest expenses and other borrowing-related expenses: JPY 283 million
 Amortization of expenses related to the new share issuance: JPY 6 million

Borrowings

 Total borrowings: JPY 30.84 billion as of July 31, 2023, including loans(including a new loan of JPY 4.5 billion scheduled on April 3, 2023 to be used forthe scheduled acquisitions) and bonds.

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.
 Given ongoing Covid uncertainty, these earnings forecasts are subject to change.

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the earnings results
for the January 2023 fiscal period and revisions to the earnings forecast for the July 2023 fiscal period, and is not an offer to sellor a solicitation of any offer to buy Ichigo Hotel shares in the United States or elsewhere. Any investment decision should bemade based upon your own judgment. The Ichigo Hotel shares may not be offered or sold in the United States without registrationor an exemption from registration under the United States Securities Act of 1933, as amended (the “Securities Act”). Ichigo
Hotel will not undertake a public offering and sale of shares in the United States, and the shares have not been and will not beregistered under the Securities Act.

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