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.

October 31, 2022
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

Change in Hotel Operator
Ichigo Investment Advisors (“IIA”), the asset management company of Ichigo Hotel,
today decided to appoint a new hotel operator for the Comfort Hotel Nagano.
1. Operator Change Overview
As part of the operator change, the Comfort Hotel Nagano is expected to be rebranded
as the Smile Hotel Nagano.
After Change

Before Change

Operator

K.K. Hospitality Operations(“Hospitality Operations”)

Greens Co., Ltd.
(“Greens”)

Lease Contract

Fixed Rent (minimum guaranteed
Fixed Rent
rent) + Variable RentMinimum guaranteed rent:
The hotel operator did not
Forecast GOP – [ (2% of Forecast consent to disclosure.
GOR) + (10% of Forecast GOP) ]x Rate*Rent*Rate
First, Second Years
Third Year & onwards

30%50%

Variable rent:
Actual GOP – Minimum
guaranteed rent – [ (2% of ActualGOR) + (10% of Actual GOP) ]Tenant Leasehold &Security Deposits

Tenant Leasehold:
JPY 10,000,000
Security Deposit: None

GOP: Gross operating profit

Tenant Leasehold:
JPY 14,093,273
Security Deposit: None

GOR: Gross operating revenue12. Reason for Change
IIA is changing the hotel operator because of the upcoming expiration of the current
lease contract with Greens. The new hotel operator will be Hospitality Operations,which primarily operates lodging-focused hotels and resort hotels. Hospitality
Operations currently operates 74 hotels across Japan, from Hokkaido in the north to
Okinawa in the south, including the Smile Hotel Tokyo Asagaya and Smile Hotel Kyoto
Shijo, which are owned by Ichigo Hotel.
Hospitality Operations was chosen from among several candidate operators based on its
competitive price offering. Under the new contract, Ichigo Hotel will earn a minimum
guaranteed rent, and introduce a variable rent component which will increase thepotential for upside earnings growth.
3. New Hotel Operator Profile
Name

K.K. Hospitality Operations

Address

2-5-16 Kanda Nishikicho, Chiyoda-ku, Tokyo

Representatives

Akio Tanaka, Representative Director

CapitalJPY 10 million

Establishment Date

July 22, 2005

Principal Business

1. Operation, preservation, management, planning, restructuringof hotels, restaurants, golf courses, tennis courts, ski resorts,
camping facilities, recreational facilities, amusement parks,
fishing ponds, go clubs, public baths, saunas, esthetic salons,fitness clubs, nursing homes, hospitals, supermarkets, andother facilities
2. Planning, sales, lease, and management of club membershiprights related to the abovementioned facilities
3. Contracted management of public and private accommodation
facilities
4. Sales, lease, management, brokerage services, and appraisal
services of real estate

Relationship with
Ichigo Hotel or IIA

・The hotel operator is an operator of the Smile Hotel Tokyo
Asagaya and Smile Hotel Kyoto Shijo, which are owned byIchigo Hotel.
・The hotel operator does not have any capital, personnel, orbusiness relationship of note with Ichigo Hotel or IIA. Inaddition, hotel operator is not a related party as defined in theEnforcement Ordinance of the Investment Trust andInvestment Corporation Law or IIA’s internal rules.

4. Date of Operator Change
December 27, 2022 (expected)
5. Earnings Outlook
The impact of the operator change on Ichigo Hotel’s January 2023 and July 2023 fiscal
period earnings has already been reflected in the forecasts presented in the September14, 2022 release “July 2022 Fiscal Period Earnings.”2