Ichigo Preserves and Improves Real Estate[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.

January 30, 2017
IssuerIchigo Hotel REIT Investment Corporation (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: Wataru Orii, President
Inquiries: Hiroto Tajitsu, Head of Administration
Tel: +81-3-3502-4892

Earnings and Dividend Forecast Revision for the July 2017 Fiscal Period
Ichigo Hotel REIT has revised up its July 2017 earnings and dividend forecast that wasannounced in the September 14, 2016 release “Earnings and Dividend Forecast Revisions
for the July 2017 Fiscal Period.”
I. July 2017 Earnings and Dividend Forecast RevisionDividendper Share(yen)Operating
Revenue(million yen)

Operating
Profit(million yen)

Recurring
Profit(million yen)

Net
Income(million yen)Previous Announced
Forecast (A)1,638

909732731

2,838Current AmendedForecast (B)1,665943

7687672,981

Difference (B)-(A)+26+34+36+36+143

+1.6%

+3.7%

+5.0%

+5.0%

+5.0%

774472392391

2,825% Change
Reference:July 2016 Actual

Number of shares outstanding at the end of the July 2017 fiscal period: 257,584 shares
The forecast presented above is based on certain preconditions set out below in“Preconditions for the July 2017 Earnings Forecast.” The actual operating revenue,operating profit, recurring profit, net income, and dividend per share may vary due tochanges in circumstances such as asset acquisitions and dispositions, tenant turnover,
unexpected maintenance and repair costs and other expenses, and changes in interest rates.
These forecasts should not be construed as a guarantee of such performance or results.
Ichigo Hotel REIT will make a forecast revision should there be a substantial discrepancy
between the forecast and actual operating results.

1II. July 2017 Earnings and Dividend Forecast Revision Rationale
Ichigo Hotel REIT is revising up its July 2017 earnings and dividend forecast taking
into consideration market trends and stronger-than-forecast January 2017 operating
results. Specifically, rental income at eight of the twelve hotels with variable rents areexceeding the previous forecast, and the replacement of a retail tenant also contributed
to an increase in rental income. As a result, operating revenue is forecast to increase by
26 million yen, operating expenses are forecast to decrease by 7 million yen,
non-operating expenses are forecast to decrease by 2 million yen, and dividend per shareis forecast to increase by 143 yen (+5.0%) compared to the previous forecast.
III. January 2017 Earnings and Dividend Forecast
The forecast is currently unchanged.

2Preconditions for the July 2017 Earnings Forecast
ItemPreconditions

Period February 1, 2017 – July 31, 2017 (181 days)

Portfolio Assets• 19 assets in total. The forecast assumes there will be no additional
acquisitions or sales through July 2017.
 The number of assets may change due to acquisitions or sales.
Within operating revenue, rental income is forecast based on current lease
contracts taking into consideration such factors as tenant trends and market
conditions.1
Forecast Operating Performance
Total Portfolio (19 Hotels)
July 2017
Occupancy2

88.9 %

ADR3

8,142 yen

Variable Rent Hotels (12 Hotels)

July 2017
OperatingRevenue

Occupancy2

92.8 %

ADR3

8,946 yen

1

The forecast rental income assumes tenants will fully pay their contractual
rents without delays or default.
2
Occupancy is calculated with the following formula:
Occupancy = Total number of guest rooms occupied during the period /(total number of guest rooms x number of days hotel was in operation duringthe period)3
ADR or Average Daily Rate is calculated with the following formula:
ADR = Total revenue from accommodation (excluding restaurant charges
and other service fees) / number of guest rooms occupied during the period.

3Details of July 2017 Rental Income(million yen)

Hotel Name

Smile Hotel Kyoto Shijo
Hotel Vista Premio Kyoto
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 Naha
Smile Hotel Asakusa
Nest Hotel Matsuyama
Comfort Hotel Okayama
Comfort Hotel Kushiro
Comfort Hotel Suzuka
Other1 (Hotel Wing InternationalNagoya, Hotel Suave Kobe Asuta,
and Hotel Livemax
Nihombashi-Hakozaki)
Retail2 (Hotel Vista Premio Kyoto,
Chisun Inn Osaka Hommachi, andSmile Hotel Tokyo Asagaya)
Total
1

Fixed Rent/
Minimum
Guaranteed
Rent
30
75
31365523
2164

Variable
Rent

Total

150–
71
32
0
61
40
151

181
75
102
69
55
84
61
216

151

–

151

30
41
15
35
45
18
15

66
69
43
49–
–
–

96
111
59
84
45
18
15

150

23

173

62

–

62905

760

1,665

Figures for Hotel Wing International Nagoya, Hotel Suave Kobe Asuta, andHotel Livemax Nihombashi-Hakozaki are included in “Other,” because thehotel operators did not provide consent to disclose hotel-specific data.
2Figures for retail tenants at Hotel Vista Premio Kyoto, Chisun Inn Osaka
Hommachi, and Smile Hotel Tokyo Asagaya are included in “Retail.”4OperatingExpenses

 Depreciation: 279 million yen. Depreciation has been calculated using thestraight-line method.
• Property and city planning taxes: 97 million yen.
• Building maintenance and repair expenses are based on what Ichigo
Investment Advisors Co., Ltd., the asset management company of Ichigo
Hotel REIT, estimates will be necessary for each asset during the period.
However, actual expenses for the period may differ significantly from these
forecast amounts for reasons including the variability of maintenance andrepair expenses, one-time costs due to unexpected building damage, etc.
 Rental expenses, Ichigo Hotel REIT’s principal operating expense (otherthan depreciation, see above), are calculated based on historical data
adjusted for anticipated expense variations.
 Actual operating expenses may differ significantly from these assumptions
due to unforeseeable factors.

Non-OperatingExpenses

 Interest expenses and other borrowing-related expenses: 149 million yen.
 Amortization of expenses related to the establishment of Ichigo Hotel REIT
and to new share issuance: 25 million yen.

Borrowings

 Total borrowings: 19,500 million yen as of July 2017

Number ofShares 257,584 shares issued and outstanding as of January 30, 2017. The forecast
assumes there will be no additional new issuance of shares through July2017.

Dividend perShare The dividend forecast assumes that distributions will comply with thedividend distribution policy stipulated in Ichigo Hotel REIT’s Articles ofIncorporation.
 The dividend per share is subject to change due to factors such as sales of
portfolio assets, changes in rental income associated with tenant turnover,
the occurrence of unexpected maintenance and repair costs, and fluctuationsin interest rates.

Dividend in
Excess ofEarnings perShare Ichigo Hotel REIT does not plan on making any dividend distribution inexcess of earnings per share or retained earnings.

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

The forecasts presented above are current figures based on certain preconditions.
Accordingly, the actual operating revenue, operating income, recurring profit, net income,and dividend per share may vary due to changes in circumstances.

5