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.

April 27, 2020
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/english
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 Revision for the July 2020 Fiscal Period
Ichigo Hotel is revising its July 2020 earnings forecast announced in the March 16,2020 release “January 2020 Fiscal Period Earnings.”
1. July 2020 Earnings Forecast Revision(JPY million)

Operating
ProfitRecurring
Profit

1,474

771

565

565

2,216

1,038

431

223

223

873-435

-340

-342

-342

-1,343% Change-29.5%-44.1%-60.5%-60.6%-60.6%

Reference:
July 2019 Actual

1,789992805804

3,154Previous Forecast(A)
New Forecast(B)Difference(B) - (A)Net
IncomeDividendper Share(JPY)

OperatingRevenue

Reference: Net Income per Share: JPY 873
Period-end number of shares outstanding: 254,974 shares
Note: Actual operating revenue, operating profit, recurring profit, net income, and dividend
may vary due to changes in circumstances, so these forecasts should not be construed as aguarantee of such results. Ichigo Hotel will make a forecast revision should there be amaterial discrepancy between the forecast and actual operating results.

12. July 2020 Earnings Forecast Revision Rationale
Covid-19 restrictions on travel and public gatherings and events is resulting incancellations by both Japanese and inbound guests. February and March RevPAR for
Ichigo Hotel’s eleven variable rent hotels thus decreased 35.4% and 66.3% year-onyear, respectively.1 (For details of the March 2020 results, please see today’s release“Ichigo Hotel Operating Results – March 2020.”)
The nationwide state of emergency declared by the Japanese government in April has
further lowered hotel demand, causing some hotels, including five of Ichigo Hotel’s, totemporarily close in response.
Given these market conditions and Ichigo Hotel’s February and March 2020 results,Ichigo Hotel is revising down its earnings forecast based upon the assumption that it will
not receive any variable rent from April through July.
Operating revenue, operating profit, and recurring profit are now forecast to fall to JPY
1,038 million (-29.5%), JPY 431 million (-44.1%), and JPY 223 million (-60.5%),
respectively. Given the lower earnings, Ichigo Hotel also is lowering its dividend
forecast to JPY 873 (-60.6%). Should an additional earnings forecast revision becomenecessary, for example due to impacts that emerge with respect to fixed and minimum
guaranteed rents, Ichigo Hotel will promptly disclose the details.
Ichigo Hotel is not revising at this time the below January 2021 forecast announced onMarch 16, 2020. Should an earnings forecast revision become necessary, Ichigo Hotelwill promptly disclose the details.
1The eleven variable rent hotels are: Smile Hotel Kyoto Shijo, Hotel Wing International
Nagoya, Nest Hotel Sapporo Ekimae, Chisun Inn Osaka Hommachi, Nest Hotel
Sapporo Odori, Valie Hotel Tenjin, Nest Hotel Osaka Shinsaibashi, Smile Hotel Tokyo
Asagaya, Nest Hotel Matsuyama, Court Hotel Kurashiki, and Nest Hotel Kumamoto.

ReferenceEarnings Forecast for the January 2021 Fiscal Period(Announced in the March 16, 2020 release “January 2020 Fiscal Period Earnings”)

January 2021

Operating
Revenue

Operating
ProfitRecurring
Profit1,525797594

Net
Income593(JPY million)
Dividendper Share
(JPY)
2,328

Due to the significant forecast uncertainty, Covid-19 impacts have not been reflected inthis earnings forecast.

2Preconditions for the July 2020 Fiscal Period Earnings Forecast
Preconditions
PeriodNumber ofHotels

 February 1, 2020 to July 31, 2020 (182 days)• The forecast assumes 23 hotels
Within operating revenue, rental income is forecast based on current lease
contracts taking into consideration such factors as hotel and market
conditions.1
14 Variable Rent Hotels
Variable rent was received for February based on actual operating results;
None was received in March. Ichigo Hotel assumes no variable rent from
April to July 2020.
1The forecast rental income assumes operators and tenants will fully pay
their contractual rents without delay or default.

Details of July 2020 Rental Income Forecast(JPY million)
Fixed Rent/
Minimum Variable
Guaranteed Rent
Rent

Hotel Name

OperatingRevenue

Smile Hotel Kyoto Shijo
Nest Hotel Sapporo Ekimae
Chisun Inn Osaka Hommachi
Comfort Hotel Hamamatsu
Nest Hotel Sapporo Odori
Valie Hotel Tenjin
Nest Hotel Osaka Shinsaibashi
Comfort Hotel Central International
Airport
Smile Hotel Tokyo Asagaya
Nest Hotel Matsuyama
Comfort Hotel Okayama
Comfort Hotel Kushiro

Total

30
313955272166

–
9––
81–

30
40
3955
352266151–1513336451866––

39424518

Comfort Hotel Suzuka

15–15

Court Hotel Kurashiki
Nest Hotel Kumamoto
Valie Hotel Hiroshima
HOTEL EMIT SHIBUYAOther1Total

31251722283953–6–––
41

31
31
1722283995

3

1Figures for Hotel Wing International Nagoya, Hotel Wing International
Kobe Shin Nagata Ekimae, Hotel Livemax Nihombashi-Hakozaki,
Grandpark-Inn Yokohama, Urbain Hiroshima Executive, andWashington Hotel Plaza Shimonoseki Eki Nishi are included in “Other”
because the hotel operators did not provide consent to disclose hotelspecific data.

Retail: JPY 36 million of rental income from retail tenants at Chisun Inn
Osaka Hommachi, Hotel Wing International Shin Kobe Nagata Ekimae,
and Smile Hotel Tokyo Asagaya (including utility income), and thebanquet hall at Nest Hotel Kumamoto.

OperatingExpenses

 Depreciation: JPY 338 million. Depreciation has been calculated using
the straight-line method.
• Property and city planning taxes: JPY 106 million• Building maintenance and repair expenses are based on what Ichigo
Investment Advisors, the asset management company of Ichigo Hotel,
estimates will be necessary for each hotel during the period. However,actual expenses for the period could differ significantly from these
forecast amounts for reasons including the variability of maintenanceand 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 theseassumptions due to unforeseeable factors.

NonOperatingExpenses

 Interest expenses and other borrowing-related expenses: JPY 203
million Amortization of expenses related to the establishment of Ichigo Hotel:
JPY 5 million

Borrowings

 Total borrowings: JPY 25.47 billion as of July 31, 2020

Number ofShares 254,974 shares issued and outstanding as of today. The forecast assumes
there will be no additional new issuance of shares through July 31,2020.

Dividend The dividend forecast assumes that dividends will comply with thedividend distribution policy stipulated in Ichigo Hotel’s Articles ofIncorporation.
 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 ofEarnings.

Other This forecast assumes that there are no material revisions to laws andregulations, the tax system, accounting standards, listing rules of theTokyo Stock Exchange, and rules of the Investment Trusts Association,
Japan, and no material changes in the state of the economy and realestate market conditions.

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