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.

September 14, 2022
IssuerIchigo Hotel REIT Investment Corporation (“Ichigo Hotel,” 3463)
1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo
Representative: Osamu Miyashita, 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
July 2022 Fiscal Period Earning Results Versus Forecast
and Earnings Forecast Revision for the January 2023 Fiscal Period
Because Ichigo Hotel’s July 2022 earnings results announced today differed from its
forecast in the July 21, 2022 release, “Earnings Forecast Revision for the July 2022
Fiscal Period,” Ichigo Hotel is detailing the difference between the results and theforecast below.
Ichigo Hotel is revising upward its January 2023 fiscal period earnings forecast
announced in the March 17, 2022 release “January 2022 Fiscal Period Earnings.”
1. July 2022 Earnings Results vs. Forecast(JPY million)
Operating
ProfitRecurring
ProfitForecast (A)

1,197

515

312311

1,220Results (B)

1,248

566

362361

1,418

Difference(B) - (A)+51+51+50+50+198% Change+4.3%+10.0%+16.1%+16.1%+16.2%

Reference:
July 2021 Actual

1,117

465

269

268

1,055

Reference: Net Income per Share: JPY 1,417
Period-end number of shares outstanding: 254,974 shares

1Net
IncomeDividendper Share(JPY)

OperatingRevenue2. January 2023 Earnings Forecast Revision(JPY million)
Operating
ProfitRecurring
Profit1,093

451

219218

858

1,205

514

283282

1,106+111+63+63+63+248+10.2%+14.0%+28.8%+28.9%+28.9%

1,125472

274342

1,345

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

Operating
Revenue

Reference: Net Income per Share: JPY 1,106
Period-end number of shares outstanding: 254,974 shares
Note: The new forecast is based on the “Preconditions for the January 2023 Earnings
Forecast” on page 3. 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 make aforecast revision should a material discrepancy emerge between this forecast and results.
3. July 2022 Earnings Results and January 2023 Earnings Forecast Revision Rationale
July 2022 Earnings Results
July 2022 fiscal period earnings was higher than forecast on the back of greater thanexpected variable rent due to Hiroshima, Kumamoto, and Aichi Prefectures continuing tolease all rooms of Valie Hotel Hiroshima, Nest Hotel Kumamoto, and Hotel Wing
International Nagoya, respectively.
As a result, July 2022 operating revenue, operating profit, recurring profit, net income,and divided per share increased by JPY 51 million (+4.3%), JPY 51 million (+10.0%),
JPY 50 million (+16.1%), JPY 50 million (+16.1%), and JPY 198 (+16.2%), respectively,
versus the forecast announced on July 21, 2022.
January 2023 Earnings Forecast Revision Rationale
Domestic leisure and business demand has been gradually recovering since March 2022.
Although a full-blown recovery of hotel demand, including inbound demand, is expected
to take time, the recovery trend is expected to continue.
Although property tax, repair expenses, and borrowing-related expenses are expected toincrease as a result of the Comfort Hotel Nagano acquisition in May 2022 and theacquisition of the Hotel Sunshine Utsunomiya announced today, fixed rent is expected toincrease as a result of the hotel acquisitions and variable rent is expected to increase as aresult of local governments continuing to lease all rooms of multiple hotels.
As a result, January 2023 operating revenue, operating profit, recurring profit, net
income, and divided per share is expected to increase by JPY 111 million (+10.2%), JPY
63 million (+14.0%), JPY 63 million (+28.8%), JPY 63 million (28.9%), and JPY 248(+28.9%), respectively, versus the forecast announced on March 17, 2022.
Should any further change to the outlook for operating results arise, Ichigo Hotel willpromptly disclose the details.
2Preconditions for the January 2023 Earnings Forecast
Preconditions
PeriodNumber ofHotels

 August 1, 2022 to January 31, 2023 (184 days)
 24 hotels as of September 14, 2022 and Hotel Sunshine Utsunomiya to beacquired.
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 Performance2
January 2023 Fiscal Period
Occupancy3
ADR4

76.8%
JPY 5,505

1

OperatingRevenue

The forecast rental income assumes operators and tenants will fully pay theircontractual rents without delay or default.
2The 16 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, and HOTELEMIT SHIBUYA. However, data for Capsule Plus Yokohama is excluded from theabove forecast because the operator did not give consent to disclose forecasts.
3Occupancy 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
Details of the January 2023 Rental Income Forecast by Hotel(JPY million)
Fixed Rent/
Minimum Variable
Hotel Name
GuaranteedRent
Rent
Smile Hotel Kyoto Shijo
34–Nest Hotel Sapporo Ekimae3230The OneFive Osaka Sakaisuji
5–
Comfort Hotel Hamamatsu
55–
Nest Hotel Sapporo Odori
264
The OneFive Fukuoka Tenjin
40–
Nest Hotel Osaka Shinsaibashi
65–
Comfort Hotel Central International Airport
151–3Total

3562655304065151

Smile Hotel Tokyo Asagaya
Nest Hotel Matsuyama
The OneFive Okayama
Comfort Hotel Kushiro
Comfort Hotel Suzuka
The OneFive Garden Kurashiki
Nest Hotel Kumamoto
Valie Hotel Hiroshima
HOTEL EMIT SHIBUYAOther1Total

59
3572
18151272244264
974

67–––
14050
–
37180

654272
181536873453021,155

1Figures 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, Comfort Hotel Nagano, and Hotel Sunshine Utsunomiya are included
in “Other” because the hotel operators did not provide consent to disclose hotelspecific data.
 Retail: JPY 33 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, and from banquet rooms at Nest
Hotel Kumamoto.

OperatingExpenses

 Depreciation: JPY 371 million. Depreciation has been calculated using thestraight-line method.
• Property and city planning taxes: JPY 123 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.
 Rental expenses, Ichigo Hotel’s principal operating expense (other thandepreciation, see above), are calculated based on historical data adjusted for
anticipated expense variations.
 Actual operating expenses may differ significantly from these assumptions due tounforeseeable factors.
 SG&A expenses: JPY 1.5 million for engineering report costs.

Non-OperatingExpenses

 Interest expenses and other borrowing-related expenses: JPY 231 millionBorrowings

 Total borrowings: JPY 26.34 billion as of January 31, 2023 based on theassumption that JPY 7 billion of short-term borrowing due November 30, 2022
and JPY 1.8 billion of long-term borrowing due January 31, 2023 will berefinanced.

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Number ofShares 254,974 shares issued and outstanding as of September 14, 2022. The forecast
assumes there will be no additional new issuance of shares and/or cancellation ofshares through January 31, 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.
 Given ongoing Covid uncertainty, these earnings forecasts are subject to change.

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