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.

January 25, 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

Earnings Forecast Revision for the January 2022 Fiscal Period
Ichigo Hotel is revising up its January 2022 fiscal period earnings forecast announced inthe September 14, 2021 release “July 2021 Fiscal Period Earnings.”
1. January 2022 Earnings Forecast Revision(JPY million)
OperatingProfit

Recurring
Profit

1,007

336

111

184

724

1,102414

209

282

1,108

+95+78+97+97+384% Change+9.4%+23.2%+87.8%+53.1%+53.0%

Reference:January 2021

1,035409

210

209823

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

OperatingRevenue

Reference: Net Income per Share: JPY 1,108
Forecast period-end number of shares outstanding: 254,974 shares
Note: The new forecast is based on the “Preconditions for the January 2022 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.

12. January 2022 Earnings Forecast Revision Rationale
Although hotel demand from tourism and business travel is expected to gradually
recover, a full-blown recovery is likely to take more time and uncertainty surrounding
market outlook has increased due to the recent spread of the omicron variant.
Ichigo Hotel is revising up its January 2022 fiscal period earnings forecast (announced on
September 14, 2021) on the back of greater than expected variable rent at the Valie Hotel
Hiroshima due to Hiroshima Prefecture temporarily leasing all rooms starting in midFebruary 2021 and continuing to do so for January 2022.
As a result, the forecast for January 2022 operating revenue, operating profit, net income,and dividend per share are expected to increase by JPY 95 million (+9.4%), JPY 78
million (+23.2%), JPY 97 million (+53.1%), and JPY 384 (+53.0%) respectively, versus
the previous forecast.
There is no revision to the July 2022 fiscal period earnings forecast.
Should any further change to the outlook for operating results arise, Ichigo Hotel willpromptly disclose the details.

2Preconditions for the January 2022 Earnings Forecast
Preconditions
PeriodNumber ofHotels

 August 1, 2021 to January 31, 2022 (184 days)
 23 hotels
 The Chisun Inn Osaka Hommachi was rebranded and reopened as The
OneFive Osaka Sakaisuji on September 1, 2021.
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

3

Occupancy
ADR4

January 2022 Fiscal Period
66.7%
JPY 4,8021

OperatingRevenue

The forecast rental income assumes operators and tenants will fully pay
their contractual rents without delay or default.
2The 16 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, Court Hotel
Kurashiki, Hotel Wing International Nagoya, Hotel Wing International
Kobe Shin Nagata Ekimae, Nest Hotel Kumamoto, Valie HotelHiroshima, HOTEL EMIT SHIBUYA, The OneFive Okayama, andCapsule Plus Yokohama. However, data for Capsule Plus Yokohama isexcluded 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 other service fees) / number of guest rooms occupied during theperiod
Details of January 2022 Rental Income Forecast by Hotel(JPY million)
Hotel Name
Smile Hotel Kyoto Shijo
Nest Hotel Sapporo Ekimae
The OneFive Osaka Sakaisuji
Comfort Hotel Hamamatsu

3

Fixed Rent/
Minimum Variable
Guaranteed Rent
Rent
34–32–––55–Total34
32–55

Nest Hotel Sapporo Odori
The OneFive Fukuoka Tenjin
Nest Hotel Osaka Shinsaibashi
Comfort Hotel Central International
Airport
Smile Hotel Tokyo Asagaya
Nest Hotel Matsuyama
The OneFive Okayama
Comfort Hotel Kushiro
Comfort Hotel Suzuka
Court Hotel Kurashiki
Nest Hotel Kumamoto
Valie Hotel Hiroshima
HOTEL EMIT SHIBUYAOther1Total

262665–––262665151–

151

59
3572
18152827
2244216
933–––––––
121–
4
125

59
35
72
181528
27
143
44
220
1,058

1Figures for Hotel Wing International Nagoya, Hotel Wing International
Kobe Shin Nagata Ekimae, Hotel Livemax Nihombashi-Hakozaki,
Capsule Plus Yokohama, Urbain Hiroshima Executive, andWashington Hotel Plaza Shimonoseki Eki Nishi are included in“Other” because the hotel operators did not provide consent to disclose
hotel-specific data.
 Retail: JPY 29 million of rental income (including utilities income) fromretail tenants at The OneFive Osaka Sakaisuji, Hotel Wing International
Kobe Shin Nagata Ekimae, and Smile Hotel Tokyo Asagaya, and frombanquet rooms at Nest Hotel Kumamoto.

OperatingExpenses

 Depreciation: JPY 351 million. Depreciation has been calculated using
the straight-line method.
 Property and city planning taxes: JPY 119 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.
 Other expenses: JPY 37.7 million as Covid-related hotel operator
support and/or potential rent reductions.
 SG&A expenses: JPY 3.1 million for engineering report costs and JPY
0.5 million for environmental certification costs.

4

NonOperatingExpenses

 Interest expenses and other borrowing-related expenses: JPY 205million

 An extraordinary gain of JPY 74 million is expected as a result ofreaching a settlement with the former operator of the Hotel Suave Kobe
Extraordinary
Asuta (current name: Hotel Wing International Kobe Shin Nagata
GainsEkimae), against which Ichigo Hotel filed an eviction lawsuit because ofdelinquent rent.
Borrowings

 Total borrowings: JPY 26.34 billion as of January 31, 2022, includingloans and bonds

Number ofShares 254,974 shares issued and outstanding as of January 25, 2022. The
forecast assumes there will be no new issuance of shares and/or
cancellation of shares through January 31, 2022.

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 ofportfolio assets, changes in rental income associated with operator
turnover, and the occurrence of unexpected maintenance and repair
costs.

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

5