This English translation is provided for information purposes only. If any discrepancy is identified between thistranslation and the Japanese original, the Japanese original shall prevail.
August 24, 2016

Midterm Financial Report for the Fiscal Year Ending December 31, 2016
(January 1, 2016 – June 30, 2016)
Japan Hotel REIT Investment Corporation
Listing:
Securities code:
URL:
Representative:

Tokyo Stock Exchange8985
http://www.jhrth.co.jp/en/
Kaname Masuda, Executive Director

Asset Management Company:
Representative:
Contact:

Japan Hotel REIT Advisors Co., Ltd.
Hisashi Furukawa, Representative Director and President
Noboru Itabashi
Director and Senior General Manager of Operations Division
Phone: +81-3-6422-0530

Scheduled date to file midterm Securities Report: September 20, 2016
Preparation of supplementary material on midterm financial report:
Schedule for presentation of midterm financial results:

Yes
Yes (Analysts and institutional investors only)(Amounts are rounded down to the nearest million yen)

1. Status summary of operation and assets for the midterm of the fiscal year ending December 31, 2016
(January 1, 2016 – June 30, 2016)(1) Operating results(Percentages: full year--changes from the previous year, midterm period--changes from the previous midterm period.)

Midterm period ended
June 30, 2016
June 30, 2015
Fiscal year ended
December 31, 2015

Midterm period ended
June 30, 2016
June 30, 2015
Fiscal year ended
December 31, 2015

Operating revenue
JPY1M
%
9,390
29.7
7,242
31.6
17,343

35.9

Operating income
JPY1M
%
5,682
33.5
4,257
41.3
10,98845.6

Ordinary income
JPY1M
%
4,868
40.2
3,472
55.4
9,295

60.9

Net income
JPY1M
4,778
3,472

%
37.6
55.4

9,294

61.0

Net income per unit
JPY
1,446
1,166
3,036

(Note 1) Net income per unit is calculated based on the period-average number of investment units issued.
(Note 2) Net income for the fiscal year ended December 31, 2015 includes gain on sale of real estate properties (¥305 million).

(2) Financial position
Midterm period ended
June 30, 2016
June 30, 2015
Fiscal year ended
December 31, 2015

Total assets
JPY1M
258,515
222,668

Net assets

240,356

JPY1M
139,230
124,071

Equity ratio
%
53.9
55.7

Net assets per unit
JPY
41,91239,509129,91454.1

41,318(Note) Net assets per unit are calculated based on the total number of investment units issued and outstanding at the end of the midterm period / full year.

－

1 －(3) Cash flows

Midterm period ended
June 30, 2016
June 30, 2015
Fiscal year ended
December 31, 2015

Cash flows fromoperating activities
JPY1M
4,963
5,073

Cash flows frominvesting activities
JPY1M(16,461)(24,829)

15,862(58,598)

Cash flows from
Cash and cash equivalents
financing activities
at end of period (fiscal year)
JPY1M
JPY1M
14,005
16,20530,47625,14542,00913,698

2. Operating forecast for the fiscal year ending December 31, 2016
(January 1, 2016 – December 31, 2016)(Percentages: changes from the previous year)

Operating revenue Operating income Ordinary income
JPY1M
Full year

22,281

%
28.5

JPY1M
13,760%25.2

Dividend per unit
(Excess of earnings
exclusive)

Net income

JPY1M

%

JPY1M

11,98028.9

11,890

Dividend per unit
resulting fromexcess of earnings

%

JPY

JPY

27.9

3,356

0

(Reference) Estimated net income per unit for the fiscal year ending December 31, 2016 (full year) ¥3,396(Calculated based on the estimate of period-average number of investment units of 3,501,175.)(Note) Reversal of reserve for dividends in the amount of ¥736 million is planned to be the source of dividend payment.

* Other(1) Changes in accounting policies, changes in accounting estimates, and restatement of financial statements for prior period after
error corrections(a) Changes in accounting policies due to revisions to accounting standards and other regulations: No change(b) Changes in accounting policies due to other reasons than above (a): No change(c) Changes in accounting estimates: No change(d) Restatement of financial statements for prior period after error corrections: No change(2) Total number of investment units issued and outstanding(a) Total number of investment units issued and outstanding at the end of the midterm period / full year(including investment units owned by Japan Hotel REIT Investment Corporation (hereinafter referred to as “JHR”))
As of June 30, 2016
3,321,907 units
As of June 30, 2015

3,140,322 units

As of December 31, 2015(b) Number of JHR’s own investment units held at the end of the midterm period / full year
As of June 30, 2016

3,144,227 units
0 units

As of June 30, 2015

0 units

As of December 31, 2015

0 units(Note) For the number of investment units serving as the basis of computation of net income per unit, please refer to “Notes on per unit information” on page 41.

* Status of midterm audit procedures
At the time of disclosure of this financial report, audit procedures for the semi-annual financial statements pursuant to the Financial
Instruments and Exchange Act of Japan are incomplete.

* Appropriate use of forecasts of results and other special items
Forward-looking statements presented in this financial report including operating forecasts are based on information currently
available to us and on certain assumptions we deem to be reasonable. As such, actual operating and other results may differ
materially from these forecasts due to a number of factors. Furthermore, we do not intend to guarantee any dividend amount by
these forecasts. For the assumptions of the operating forecast and notes for the use of operating forecast, please refer to “2.
Investment policies and operating results; (2) Operating results; (B) Outlook for the second half of the fiscal year” on page 6 and“Assumptions of the operating forecast for the full year of the fiscal year ending December 31, 2016 (17th period)” on page 12.

－2 －1. Related parties of the investment corporation
Disclosure is omitted because there is no significant change from “Structure of the investment corporation” in the most recent
Securities Report (submitted on March 23, 2016).

2.

Investment policies and operating results(1) Investment policies
Disclosure is omitted because there is no significant change from “Investment policies,” “Investment targets” and “Distribution
policy” in the most recent Securities Report (submitted on March 23, 2016).

(2) Operating results(A) Overview of the midterm period under review(a) Brief history and principal activities
Japan Hotel REIT Investment Corporation (JHR) was established under the Act on Investment Trusts and Investment
Corporations (Act No. 198 of 1951, as amended; hereinafter referred to as the “Investment Trusts Act”) on November 10,2005 and was listed on the Real Estate Investment Trust (“REIT”) section of the Tokyo Stock Exchange (Securities code:8985) on June 14, 2006.
JHR entrusts the asset management to Japan Hotel REIT Advisors Co., Ltd. (hereinafter referred to as the “AssetManagement Company”). Focusing on importance as the social infrastructure and profitability of hotels, JHR primarily
invests in real estate which are wholly or partially used as hotels or real estate equivalents of such real estate or related
assets that are backed by such real estate or real estate equivalents (hereinafter referred to as “Real Estate for Hotels, etc.”).
JHR, the former Nippon Hotel Fund Investment Corporation, merged with the former Japan Hotel and Resort, Inc.
(hereinafter referred to as the “former JHR”) with an effective date of April 1, 2012 (hereinafter referred to as the“Merger”) and changed its name to Japan Hotel REIT Investment Corporation. Since the Merger through the end of themidterm of the 17th fiscal period, JHR has carried out six public offerings for capital increase and continuously acquired
hotels that are “highly competitive being located in areas where domestic and inbound leisure demand is expected over the
medium to long term.”
By implementing aforementioned growth strategy, JHR has steadily expanded its asset size with new acquisitions totaling¥130,174 million (acquisition price base) for 18 properties since its restart by the Merger and during over 4-year period,
having its portfolio with a combined acquisition price of ¥239,626 million for 38 properties as of the end of the midterm of
the 17th fiscal period. In addition, after the end of the midterm period, JHR implemented capital increase in July throughthe seventh public offering after the Merger to fund or will fund the acquisition of three properties (total (anticipated)acquisition price of ¥47,175 million).
The number of JHR’s investment units issued and outstanding was 3,321,907 as of June 30, 2016.
(b) Investment performance
During the midterm period under review (6-month period from January 1, 2016 through June 30, 2016), the Japanese
economy witnessed a high level of corporate earnings; however, corporations retained cautions in their business sentimentlargely due to yen appreciation in the foreign exchange rate since the beginning of this calendar year, the Kumamoto
Earthquake occurred in April 2016, an increasingly uncertain global economy influenced by the referendum of Brexit heldin June, etc. While consumer sentiment in relation to consumer spending remained stagnant, the employment situation has
been improved, and the domestic economy has been showing a modest recovery trend. Under these circumstances, theleisure demand among Japanese in the tourism industry has been growing steadily, and the number of foreign visitors(hereinafter called “inbound”), backed by the effects of the Japanese government’s nationwide measures aiming to becomea major tourism nation, primarily Asian countries and regions marking high rate of economic growth, recorded 19.73
million in 2015, an increase by 47.1% year-on-year and the highest ever.
Consequently, the Japanese government established a new goal aiming to increase the number of inbound tourists by up to
40 million by 2020 and 60 million by 2030 in the “Council for the Development of a Tourism Vision to Support the Futureof Japan” held in March 2016. Despite the appreciating status of the yen since the beginning of 2016, the number of
inbound tourists has been continuing unabated with a cumulative total of 11.71 million, rising 28.2% year-on-year, during－

3 －the first half of the year (January through June), and as such, the upward trend has been continuing. Given such a strong
wind behind Japan’s tourism industry and hotel industry, many of the hotels owned by JHR have achieved a rise inoperating performance, mainly in the rooms department, allowing JHR to feel again how strong the leisure demand wasboth in and outside Japan. Also in the investment market for hotels, a great number of investors had anticipated future
growth of hotel properties; however, transactions of hotel properties remained brisk as a large number of investment funds,
etc. started to dispose hotel properties to realize profit through hotel investment.
In such an environment, in January 2016, JHR implemented capital increase through public offering, the sixth since theMerger, to complement a decrease in cash on hand, a decrease equivalent to the cash on hand used to fund the acquisitionof ACTIVE-INTER CITY HIROSHIMA (Sheraton Grand Hiroshima Hotel) in December 2015, for an acquisition price of¥17,320 million. JHR also used the proceeds from the public offering to newly acquire CANDEO HOTELS UENO-KOEN,
located in the Ueno area in central Tokyo which benefits from an increase in inbound tourism demand, for an acquisition
price of ¥6,705 million. JHR has been contemplating expansion of its asset size through continuous acquisitions ofproperties with its consistent growth strategy such as the acquisition of Hotel Centraza Hakata, for an acquisition price of¥7,197 million in April this year and other measures.
For its owned hotels, JHR endeavored to expand its earnings by continuously discussing with the hotel operators forincreasing revenue, after assessing the business environment and operation conditions at each hotel on a monthly basis. For
hotels with variable rent structures including revenue sharing structures and management contracts, hotel earnings
increased against the backdrop of strong domestic and overseas leisure demand, which achieved an increase in JHR’s rent
revenue, etc.
With respect to capital expenditures in portfolio properties, JHR invested in the renewal of its facilities in order to maintainthe value of its assets, and for hotels with variable rent structures, etc., JHR practically implemented active asset
management such as strategic refurbishment, etc. to accomplish strong internal growth and to achieve improvement of
profitability.
With regard to status of operations of the five hotels (hereinafter referred to as the “five HMJ hotels”) (Note 1) which JHRleases to Hotel Management Japan Co., Ltd. (hereinafter referred to as “HMJ”) under variable rent contracts, and hotels
which JHR leases to HMJ Group companies under variable rent contracts, namely, Okinawa Marriott Resort & Spa,
ACTIVE-INTER CITY HIROSHIMA (Sheraton Grand Hiroshima Hotel) and Hotel Centraza Hakata, together they haveproduced a year-on-year increase both in sales and GOP (gross operating profit), led by the rooms department, during themidterm period under review. The rooms department achieved an increase in not only guest room occupancy rate but also
the ADR (average daily rate), allowing JHR to feel how strong the leisure demand was. For further details of sales, GOP
and other management indicators for the HMJ Group Hotels (Note 1), please refer to “<Reference Materials 2> <1> Sales
and GOP of the HMJ Group Hotels” on page 21 and “D. Overview of the hotel business; (2) Major indicators of the hotelbusiness; (a) The Eight HMJ Hotels” on page 69. Furthermore, as announced in the “Notice Concerning Revision of FixedTerm Lease Agreement” dated December 18, 2015, JHR negotiated with HMJ to modify the terms and conditions of the
fixed-term lease agreement for the five HMJ hotels, as JHR believed that HMJ’s profitability would increase in accordancewith a shift to independent hotel operations by HMJ. As a result, the variable rent ratio was changed from 81.5% to 85.0%
effective January 1, 2016 while JHR returned part of the security deposits to HMJ. This has made it possible for JHR toobtain the enhanced performance of the hotels as its earnings.
Moreover, inbound guests and domestic leisure demand were successfully attracted by the six hotels (Note 2) for which
AAPC Japan K.K. (hereinafter referred to as “Accor”), a Japanese subsidiary of Accor Hotels headquartered in Paris,
France, serves as the operator (hereinafter referred to as the “six Accor hotels”). These hotels posted a year-on-yearincrease both in sales and GOP, mainly led by an increase in the ADR. For further details of sales, GOP and othermanagement indicators for the six Accor hotels, please refer to “<Reference Materials 2> <2> Sales and GOP of the Six
Accor Hotels” on page 23 and “D. Overview of the hotel business; (2) Major indicators of the hotel business; (b) The Six
Accor Hotels” on page 70.
Furthermore, efforts were made to attract inbound tourists at the six the b hotels (Note 3), which are leased to thesubsidiaries of the Ishin Hotels Group with a variable rent structure, and consequently a year-on-year increase wasachieved both in sales and GOP. For further details of sales, GOP and other management indicators for the six the b hotels,－

4 －please refer to “<Reference Materials 2> <3> Sales and GOP of the Six the b Hotels” on page 24 and “D. Overview of thehotel business; (2) Major indicators of the hotel business; (c) The Six the b Hotels” on page 70.
In addition, JHR not only increased the size of its asset portfolio by acquiring new properties, but also made steadyprogress in reducing real estate management costs, general and administrative expenses, and borrowing costs. Meanwhile,
repair costs caused by the Kumamoto Earthquake, in the amount of ¥90 million, were appropriated in extraordinary loss.
(Note 1)

(Note 2)
(Note 3)

The five HMJ hotels represent the five hotels, namely, Kobe Meriken Park Oriental Hotel, Oriental Hotel tokyo bay, Namba Oriental
Hotel, Hotel Nikko Alivila and Oriental Hotel Hiroshima. The eight HMJ hotels represent the eight hotels comprising the five HMJ
hotels plus Okinawa Marriott Resort & Spa, Sheraton Grand Hiroshima Hotel, which is the major facility of ACTIVE-INTER CITYHIROSHIMA, and Hotel Centraza Hakata. The HMJ Group Hotels represent the nine hotels comprising the eight HMJ hotels plus
HOTEL VISTA GRANDE OSAKA which was acquired in August 2016. The same shall apply hereinafter.
Represents the six hotels, namely, ibis Tokyo Shinjuku, ibis Styles Kyoto Station, ibis Styles Sapporo, Mercure Sapporo, Mercure
Okinawa Naha and Mercure Yokosuka. The same shall apply hereinafter.
Represents the six hotels, namely, the five hotels comprising the b akasaka-mitsuke, the b ikebukuro, the b ochanomizu, the b hachioji
and the b hakata (hereinafter referred to as “the five the b hotels”) plus the b suidobashi, which was rebranded from the former DormyInn Suidobashi on July 1, 2015. The same shall apply hereinafter.

(c) Funding
JHR acquired ACTIVE-INTER CITY HIROSHIMA (Sheraton Grand Hotel Hiroshima) in December 2015, the previous
fiscal year. The acquisition price was ¥17,320 million and was procured by the combination of short-term loans of ¥9,000
million and cash on hand. In this fiscal year, JHR procured total of ¥14,618 million by way of capital increase throughpublic offering in January 2016 and capital increase through third-party allotment in February 2016, as well as the ¥2,000
million in long-term loans to complement a decrease in cash on hand, which is a decrease equivalent to the cash on handused to fund the acquisition of ACTIVE-INTER CITY HIROSHIMA (Sheraton Grand Hiroshima Hotel) and to acquire
CANDEO HOTELS UENO-KOEN. JHR reduced a part of ¥11,214 million (¥114 million) in existing long-term loans andrefinanced during the period from February and March this year, and JHR also refinanced ¥9,000 million short-term loans
for the acquisition of ACTIVE-INTER CITY HIROSHIMA (Sheraton Grand Hiroshima Hotel) to long-term loans byprocuring ¥6,000 millions in long-term loans and ¥3,000 million in the investment corporation bonds. Also, in April thisyear, JHR acquired Hotel Centraza Hakata with ¥7,000 million short-term loans and cash on hand.
Consequently, as of the end of this midterm period, interest-bearing debt totaled ¥111,558 million, including short-termloans payable of ¥8,700 million, current portion of long-term loans payable of ¥633 million, long-term loans payable of¥87,224 million, investment corporation bonds of ¥2,500 million which are due within one year, investment corporation
bonds of ¥12,500 million, and the ratio of interest-bearing debt to total assets at the end of this midterm period (Note 4)
stood at 43.2%. Additionally, through refinancing of the loans and new borrowing, JHR was able to lower its funding costs,
extend and diversify its repayment period.
Concurrently, JHR concluded interest rate swap contracts to fix the interest on ¥18,700 million in total on loans in Marchin order to benefit from the current negative interest rate environment and to avoid the increase in interest payment
resulting from future interest rate rises. These actions brought the fixed rate ratio (including the interest rate cap purchaseportion) on JHR’s total interest-bearing debt to around 88%.
Furthermore, JHR also concluded interest swap contract as of July 27, 2016 which is after the end of the midterm period to
fix the interest on existing ¥2,900 million on loans.
(Note 4) Ratio of interest-bearing debt to total assets at end of the midterm period = Balance of interest-bearing debt at end of the midterm period
÷ Total assets at end of the midterm period

As of June 30, 2016, JHR’s issuer ratings were as follows.
Rating agency
RatingOutlook

R&I

A−

Positive

JCR

A

Positive(d) Financial results
As a result of the abovementioned asset management, operating revenue, operating income and ordinary income were
¥9,390 million, ¥5,682 million and ¥4,868 million, respectively, for the midterm period under review (six-month period
from January 1 to June 30, 2016). Net income for the midterm period was ¥4,778 million.
－

5 －Variable rent from the hotels with variable rent from the eight HMJ hotels in the amount of ¥1,251 million is included inoperating revenue, but this amount is calculated based on the eight HMJ hotels’ GOP for the midterm period under review.
The variable rent to be ultimately received from the eight HMJ hotels will be determined by the eight HMJ hotels’ GOP for
the full year (12- month period).
JHR settles accounts on an annual basis and investment corporations do not have a system for interim dividends under theInvestment Trusts Act. Accordingly, no distribution of earnings can be made in the midterm period under review.
Distribution of earnings is made based on the earnings for the full year (12-month period from January 1, 2016 to
December 31, 2016). With regard to such distribution of earnings, in accordance with the policy for earnings dividend to
exceed 90% of JHR’s distributable profit that is defined by Article 67-15 of the Act on Special Measures Concerning
Taxation (Act No. 26 of 1957, as amended), the plan is that the amount calculated by adding a reversal of reserve fordividends (amount of use of negative goodwill, such as the amount equivalent to losses on retirement of existing facilities
incurred by the replacement of equipment) to unappropriated retained earnings would all be distributed except for fractionsof less than one yen of dividend per unit.
(B) Outlook for the second half of the fiscal year(a) Investment policies and issues to be addressed
The Japanese economy is expected to moderately recover due to postponement of the hike in consumption tax rate to 10%
and effects of various governmental policies including prompt and steady implementation of the FY2016 supplementarybudget under the circumstances where employment and income environment showing a continuing improvement trend.
While having such expectation, attention must be paid, however, to the downward risks on the Japanese economy whichmight be caused by rising uncertainty in the world economy and instability in financial markets including the Brexit issue
and the downside swing, etc. of emerging Asian economies including China and resource-rich countries, etc. Moreover, inthe environment surrounding the hotel industry, it is expected JHR will continue to benefit from a further increase in thenumber of inbound tourists thanks to nationwide various measures, etc. in relation to tourism promotion besides the solid
domestic leisure demand.
Under such circumstances, JHR intends to manage assets based on the approach described below aiming to make JHR’s
portfolio more appealing by simultaneously pursuing stability centered on fixed rent revenue and upside potential derived
from variable rent, etc.
Internal growthWith regard to properties under fixed rent contracts, JHR aim for setting appropriate rent based on market rent levels where
each hotel is located and capability of each tenant to bear the rent, along with aim for increasing rent level including
adoption of variable rent structures under robust accommodation market these days. For properties under variable rent
contract structures including management contract structure, JHR will, on the back of strong accommodation market,
undertake to improve profitability through implementation of strong internal growth, and consequently, will act to increase
variable rent, etc. by practicing active asset management which aims for improvement in quality of portfolio. Morespecifically, JHR’s intention is to implement measures such as strategic capital expenditures (CAPEX) such as room
renovation, etc. to improve ADR, changing operators to the ones with optimum skills corresponding to the characteristic ineach hotel or rebranding, changing rent structure to which capable to capture upside and replacement of hotel assets(disposition), etc. to improve the quality of portfolio. JHR, as an asset management company, will not only simply rely on
voluntary efforts for improvement of performance made by operating companies such as HMJ but also implement
measures of internal growth promotion by executing specific strategies in each hotel under management based on highlevel discussions in cooperation with the operators such as “HMJ.”
In addition to the primary hotel groups with variable rent structures, namely the eight HMJ hotels, the six Accor hotels andthe six the b hotels, and properties with upside sharing structure, through acquisition of HOTEL VISTA GRANDE OSAKA(Note 5) in August 2016 and anticipated acquisition of Hilton Nagoya in September this year, JHR will aim to further
increase variable rent level through expansion and enhancement as core of internal growth.
(Note 5) After the acquisition of HOTEL VISTA GRANDE OSAKA, the subject hotel will be rebranded to “Holiday Inn Osaka Namba,” which isan international brand of InterContinental Hotels Group.

External growth
In terms of external growth strategies, it is JHR’s basic policy to acquire Real Estate for Hotels, etc., with prospects for
attracting domestic and inbound leisure demand, mainly located in strategic investment areas of JHR which include－ 6 －Hokkaido Area, Tokyo and Bay Area, Osaka and Kyoto Area, and Fukuoka and Okinawa Area. Based on such policy, JHR
ensures stabilized profitability and establish portfolio consciously with growth potential in order to achieve operational
upside. In the process of property acquisitions, JHR places emphasis on physical aspects (infrastructure) of such hotel
properties such as buildings and facilities, soft aspects (service) such as creditworthiness, operational and management
skills of lessees and operators of the hotels and locational predominance which provides the basis for stability for demands
and future potential.
More specifically, our investment is targeted on full-service hotels and resort hotels which know-how in operational andmanagement skills are required for hotel operations and barriers to entry are seen as high when newly opened due tolimitations of invested-capital and locations. For limited-service hotels, JHR’s focus is placed on creditworthiness andoperational abilities of lessee and operators of hotels, age of the properties, locations, room configurations and profitability.
For hotels specializing in budget-type (low priced) accommodation mostly consist of single rooms where competitivenessis only traced in its pricing, JHR particularly becomes more selective. Additionally, JHR aims for improving the quality of
portfolio in order to make the most of this competitiveness by diversifying hotel brands including expansion ofinternational brands as necessary.
In the hotel investment market, competition in acquisition is intensifying. Under such circumstances; however, JHR keeps
maintaining superiority in the investment market for hotels by its high recognition and creditworthiness as the REIT
specializing hotels, proposals and implementations for diversified rent structures including a management contract structurereflecting high level of expertise as the asset management company, flexibility in property acquisitions utilizing
warehousing function and strengthened availability in property acquisition opportunities using HML’s platform. In thismanner, JHR newly acquires properties contemplating further measures for improving profitability by executing active
asset management after property acquisitions.
Finance strategy
JHR seeks to maintain and enhance the relationships of trust with financial institutions with which it does business, while
implementing operations with a conservative financial strategy as a basic policy putting importance on ensuring financial
stability and strength by continuously diversifying the means of financing. It aims to conduct financial operations bykeeping the ratio of interest-bearing debt to total assets at no larger than 50% as in the past. In addition, when seeking new
funding for property acquisitions or refinancing existing debt, JHR will work to reinforce its existing relationships withmultiple lenders and diversify further funding methods while seeking to spread out the maturity dates of its debt andconsidering the balance of borrowing costs.
Furthermore, while monitoring the conditions of the interest rate market, JHR aims to further improve its financial
foundation by extending maturity dates and managing risk of interest rates market by fixing rates, etc. Consequently, after
the anticipated acquisition of an asset “Hilton Nagoya” in September this year, it is anticipated that the LTV ratio to total
assets to be around 40.1%, average remaining term of the loans to be 4.5 years and the fixed interest rate ratio to be around
92%.
(b) Significant subsequent events
1. Acquisition of assets
On August 1, 2016 and August 19, 2016, JHR acquired two assets for ¥31,925 million in total acquisition price as follows.
Property name

HOTEL VISTA GRANDE OSAKA

Asset category

Real estate beneficial interest in trust and movable assets attached to the hotel

Asset type

Hotel

Address

5-15 Soemon-cho, Chuo-ku, Osaka-shi, Osaka

Acquisition dateAugust 1, 2016

SellerGK APOLLO

Acquisition price (Note)¥27,000 million(Note) The acquisition price does not include expenses for acquisition, settlement of property taxes and city planning taxes, and consumption taxes.

Property name

HOTEL ASCENT FUKUOKA

Asset category

Real estate beneficial interest in trust－

7 －Asset type

Hotel

Address

3-3-14 Tenjin, Chuo-ku, Fukuoka-shi, Fukuoka

Acquisition dateAugust 19, 2016

SellerGodo Kaisha Tenjin 1

Acquisition price (Note)¥4,925 million(Note) The acquisition price does not include expenses for acquisition, settlement of property taxes and city planning taxes, and consumption taxes.

2. Contract conclusion on acquisition of asset
On July 7, 2016, JHR concluded a purchase and sale agreement regarding acquisition of the following asset.
Name of property for anticipatedacquisition

Hilton Nagoya

Asset category

Real estate beneficial interest in trust

Asset type

Hotel

Address

1-3-3 Sakae, Naka-ku, Nagoya-shi, Aichi

Anticipated acquisition date

September 1, 2016

Planned seller

GK HN Project

Anticipated acquisition price(Note)¥15,250 million(Note) The anticipated acquisition price does not include expenses for acquisition, settlement of property taxes and city planning taxes, and consumption taxes.

3. Execution of the loan agreements
On August 10, 2016, JHR concluded the loan agreements as described below to partly fund the acquisition of the real estate
beneficial interest in trust and movable assets attached to the hotel as stated in “1. Acquisition of assets” and “2. Contractconclusion on acquisition of asset” above.
(1) Term Loan 26
Sumitomo Mitsui Banking Corporation / Shinsei Bank, Limited / Mizuho Bank, Ltd. /Planned lenders

Resona Bank, Ltd. / The Nomura Trust and Banking Co., Ltd. / The Chiba Bank, Ltd. / The
Bank of Fukuoka, Ltd.

Planned amount of the loan

¥9,500 million

Interest rate

Base interest rate (JBA Japanese Yen TIBOR for one month) + 0.65%

Scheduled date of borrowing

September 1, 2016

Method of principal repayment

Lump-sum payment on the maturity date

Maturity date

September 30, 2025

Collateral

Unsecured/Unguaranteed(2) Term Loan 27
Planned lender

Sumitomo Mitsui Trust Bank, Limited

Planned amount of the loan

¥1,300 million

Interest rate

Base interest rate (JBA Japanese Yen TIBOR for three months) + 0.50%

Scheduled date of borrowing

September 1, 2016

Method of principal repayment

Lump-sum payment on the maturity date

Maturity date

September 30, 2024

Collateral

Unsecured/Unguaranteed(3) Term Loan 28
Planned lender

Mitsubishi UFJ Trust and Banking Corporation

Planned amount of the loan

¥2,000 million

Interest rate

Base interest rate (JBA Japanese Yen TIBOR for three months) + 0.50%

Scheduled date of borrowing

September 1, 2016－

8 －

Method of principal repayment

Lump-sum payment on the maturity date

Maturity date

September 30, 2024

Collateral

Unsecured/Unguaranteed(4) Term Loan 29
Planned lender

Development Bank of Japan Inc.

Planned amount of the loan

¥700 million

Interest rate

0.59%

Scheduled date of borrowing

September 1, 2016

Method of principal repayment

Lump-sum payment on the maturity date

Maturity date

September 30, 2024

Collateral

Unsecured/Unguaranteed(5) Term Loan 30
Planned lender

Aozora Bank, Ltd.

Planned amount of the loan

¥500 million

Interest rate

To be determined (Fixed interest rate)

Scheduled date of borrowing

September 1, 2016

Method of principal repayment

Lump-sum payment on the maturity date

Maturity date

September 30, 2024

Collateral

Unsecured/Unguaranteed

4. Issuance of new investment units
JHR resolved to issue new investment units at the Board of Directors meetings held on July 7, 2016 and July 20, 2016. Payment
for the new investment units was completed on July 27, 2016 and August 23, 2016, and the investment units were issued under
the following terms and conditions. As a result, JHR’s unitholders’ capital increased to ¥134,829,448,209, with the number ofinvestment units issued and outstanding totaling 3,761,907 units.
(a) Issuance of investment units: (domestic public offering and overseas offering)Number of investment units issued:
Of which domestic public offering:

428,260 units
164,260 units

Of which overseas offering:
Issue price:

264,000 units¥81,536 per unit

Total issue price:
Paid-in amount (issue value):¥34,918,607,360¥78,956 per unit

Total paid-in amount (total issue value):
Payment date:¥33,813,696,560
July 27, 2016(b) Issuance of new investment units (third-party allotment)
Number of investment units issued:
11,740 units
Paid-in amount (issue value):
Total paid-in amount (total issue value):¥78,956 per unit
¥926,943,440

Payment date:
Allottee:August 23, 2016
SMBC Nikko Securities Inc.

(c) Use of funds
JHR allocated the proceeds in the amount of ¥33,813,696,560 procured from the domestic public offering andoverseas offering to cash on hand in order to complement part of a decrease in cash on hand, which is a decrease that
occurred when JHR had used cash on hand to partly fund the acquisition of Hotel Centraza Hakata (including
expenses for acquisition) that it acquired on April 1, 2016. JHR also uses the subject proceeds to partly fund theacquisition of HOTEL VISTA GRANDE OSAKA, Hilton Nagoya and HOTEL ASCENT FUKUOKA as describedabove in “1. Acquisition of assets” and “2. Contract conclusion on acquisition of asset.” In addition, with regard to theremaining proceeds procured from the domestic public offering and overseas offering together with the proceeds－

9 －procured from the third-party allotment in the amount of ¥926,943,440 will be cash on hand and will be used to partly
fund the future acquisition of specified assets, partly repay the loan amount or appropriate to repairs and capital
expenditures to maintain and improve competitiveness of the existing properties.

－

10 －

(c) Operating forecast
The following is the JHR’s operating forecast for the full year of the fiscal year ending December 31, 2016 (17th period).
For the assumptions of the operating forecast, please refer to “Assumptions of the operating forecast for the full year of the
fiscal year ending December 31, 2016 (17th period)” on page 12.
In addition, the dividend per unit based on the annualized effect of the acquisition of CANDEO HOTELS UENO-KOEN
acquired on February 1, 2016, Hotel Centraza Hakata acquired on April 1, 2016, HOTEL VISTA GRANDE OSAKA
acquired on August 1, 2016, HOTEL ASCENT FUKUOKA acquired on August 19, 2016 and Hilton Nagoya to be acquiredon September 1, 2016, is assumed to be ¥3,500 For the annualized effect of the new acquisitions of such properties above,please refer to “<Reference Materials 1> Highlights of the operating forecast and forecast of dividend” on page 20. For theassumptions of the forecast of the annualized effect, please refer to “<Reference Materials 3> Assumptions of the forecastof the annualized effect” on page 25.

Full year of the fiscal year ending
December 31, 2016 (17th period)

Forecast this time

Previous forecast(Note 1)

Increase(Decrease)

Operating revenue¥22,281 million¥22,095 million¥186 million

Operating income¥13,760 million¥13,621 million¥139 million

Ordinary income¥11,980 million¥11,841 million¥139 million

Net income¥11,890 million¥11,751 million¥139 million¥3,356¥3,318

¥38

¥0

¥0

¥0

Dividend per unit
Dividend per unit resulting fromexcess of earnings(Note 1) These are figures announced in the “Notice Concerning Revision of Operating Forecast for Fiscal Year Ending December 2016 (17thPeriod)” dated July 7, 2016.
(Note 2) The forecast figures above are the current forecasts calculated based on certain assumptions. As such, actual operating revenue,
operating income, ordinary income, net income, dividend per unit and dividend per unit resulting from excess of earnings may vary due
to changes in the circumstances. Furthermore, the forecasts are not intended to guarantee any dividend amount.

－

11 －

Assumptions of the operating forecast for the full fiscal year ending December 2016 (17th period)
Item
Calculation
periodAssumptions
・Full year (17th Period): January 1, 2016 through December 31, 2016 (366 days）
・The 38 properties owned by JHR as of the end of June 2016, plus the following three assets (Acquired Assets andAsset for Anticipated Acquisition), to total 41 properties are assumed.
<Acquired Assets and Asset for Anticipated Acquisition >Acquisition date (Scheduled

Name of asset

acquisition date)

Assets undermanagement

August 1, 2016

HOTEL VISTA GRANDE OSAKA

August 19, 2016

HOTEL ASCENT FUKUOKA

September 1, 2016

Hilton Nagoya

・It is assumed that there will be no change (acquisition or disposition, etc.) in assets under management other than
the above through the end of the fiscal year ending December 2016 (17th period). However, the actual results may
fluctuate depending on the changes in assets under management that may take place.
・Operating revenue is calculated based on the lease and other contracts effective as of today and in consideration ofcompetitiveness of hotels, market environment and other factors. If there are lease contracts with regard tofacilities other than hotels, such as retail facilities and offices, etc., operating revenue calculated on the said lease
contracts is included.
・Rents, etc. of the main hotels are calculated based on the following assumptions.
(1) The Five HMJ Hotels
The assumptions of the fixed rent and variable rent for the five HMJ hotels are as follows.
Annual rent (¥6,792 million) = Fixed rent (¥3,221 million/year) + Variable rent
Variable rent = [(a) Total GOP of the five HMJ hotels – (b) GOP base amount] × 85.0%
The five HMJ hotels for the fiscal year ending December 2016 (17th period)(Unit: millions of yen)

Operatingrevenue

Total GOP of the five HMJ

GOP base amount

Variable rent

hotels(a)(b)((a) – (b)) × 85.0%

Midterm

2,884

1,675

1,027

Full year

7,553

3,351

3,571

(*1) Please refer to “<Reference Materials 2> <1> Sales and GOP of the HMJ Group Hotels” below for thecomparison of sales and GOP of the five HMJ hotels.
(2) Okinawa Marriott Resort & Spa
The fixed rent and variable rent of Okinawa Marriott Resort & Spa are calculated as follows.
Annual rent (¥1,111 million) = Fixed rent (¥550 million/year) + Variable rent
Variable rent = [(a) Hotel GOP – (b) GOP base amount] × 90.0%(Unit: millions of yen)
Hotel GOP(*)

GOP base amount

Variable rent

(a)

(b)

((a) – (b))×90.0%

Midterm

347

350

－

Full year

1,323

700

561

Please refer to “<Reference Materials 2> <1> Sales and GOP of the HMJ Group Hotels” below for sales and
GOP of Okinawa Marriott Hotel Resort & Spa.

－

12 －

Item

Assumptions(3) ACTIVE-INTER CITY HIROSHIMAACTIVE-INTER CITY HIROSHIMA is a complex facility composed of a hotel building, an office building, anda retail zone. Rent for each facility is calculated as follows.
(a) Hotel building (Sheraton Grand Hiroshima Hotel)
Annual rent (¥632 million) = Fixed rent (¥348 million/year)+ Variable rent
Variable rent = [(a) Hotel GOP – (b) GOP base amount] × 82.5%(Unit: millions of yen)
Hotel GOP(a)

GOP base amount(b)

Variable rent((a) – (b)) × 82.5%

Midterm

388

234

127

Full year

812

468

284

(*)

Please refer to “<Reference Materials 2> <1> Sales and GOP of the HMJ Group Hotels” below for sales and
GOP of Sheraton Grand Hiroshima Hotel.

(b) Office building and retail zone
Rent from the office building and the retail zone for the fiscal year ending December 2016 (17th period) is
expected to be ¥220 million for the midterm (actual) and ¥447 million for the full year. These figures include ¥8
million for the midterm (actual) and ¥16 million for the full year as variable rent pursuant to an agreement forrevenue sharing with some retail tenants.
(4) Hotel Centraza Hakata
The fixed and variable rent of Hotel Centraza Hakata is calculated as follows.
Rent for the fiscal year ending December 2016 (17th period) (*1) (¥560 million) = Fixed rent (¥300 million) + Variable

Operatingrent

revenue

Variable rent = [ (a) Hotel GOP – (b) GOP base amount ] × 90.0%(Unit: millions of yen)

Hotel GOP

GOP base amount

Variable rent

(a)

(b)

((a) – (b)) × 90.0%

Midterm

213

106

96

Full year

607

318

260

(*1) Rent for the fiscal year ending December 2016 (17th period) shows the estimated figure to incur during the 275
days from April 1, 2016 to December 31, 2016. For your information, it is expected that the GOP base amountafter the fiscal year ending December 2017 will be ¥425 million and the annual fixed rent will be ¥400 million.
(*2) Please refer to “<Reference Materials 2> <1> Sales and GOP of the HMJ Group Hotels” below for sales and GOP
of Hotel Centraza Hakata.

(5) HOTEL VISTA GRANDE OSAKA
The fixed and variable rent of HOTEL VISTA GRANDE OSAKA is calculated as follows.
Rent for the fiscal year ending December 2016 (17th period) (*1) (¥594 million) = Fixed rent (¥240 million) + Variable
rent

Variable rent ＝ [ (a) Hotel GOP - (b) GOP Base Amount ] × 92.5%

Full year(Unit: millions of yen)

Hotel GOP

GOP Base Amount

(a)

(b)

Variable rent((a)－(b))× 92.5%

652

270

354

(*1)

Rent for the fiscal year ending December 2016 (17th period) shows the estimated figure to incur during the 153
days from August 1, 2016 to December 31, 2016. For your information, it is expected that the GOP base amountfrom the fiscal year ending in December 2017 will be ¥650 million and the annual fixed rent will be ¥576 million.

(*2)

Please refer to “<Reference Materials 2> <1> Sales and GOP of the HMJ Group Hotels” below for sales and GOPof HOTEL VISTA GRANDE OSAKA.

13

Item

Assumptions(6) The Six Accor Hotels
Income from management contracts and variable rent of the six Accor hotels
ibis
ibis Styles
ibis Styles
MercureMercureTokyo
Kyoto Station
SapporoSapporoOkinawa Naha
Shinjuku(Unit: millions of yen)
MercureYokosuka

Total

Midterm

216

247

238

212

210

141

1,267

Full year

453

536

610

596

470

228

2,896

(*1) Please refer to “<Reference Materials 2> <2> Sales and GOP of the Six Accor Hotels” below for thecomparison of sales and GOP of the six Accor hotels.
(*2) For income from management contracts, it is assumed that each hotel’s GOP amount is recognized as income
from management contracts and the management contract fees to be paid by JHR are recognized as an
operating expense. In cases where certain revenue from non-hotel tenant(s), etc. is included in the hotel’s
GOP, such tenant revenue is subtracted from GOP to calculate income from management contracts. Suchtenant revenue is recognized as parking area rent.
(*3) Mercure Sapporo includes rent which is linked to the sales of tenant(s) other than the hotel.
(7) The Six the b Hotels
Fixed and variable rent of the six the b hotels (midterm)
the b
the b
the b
akasakasuidobashi
ikebukuro
mitsuke
68(Unit: millions of yen)the bochanomizu

the bhachioji

the bhakata

Total

108

34

62

43

359

Fixed (*1)

42

Variable

19

81

79

20

47

64

314

Total

62

149

188

55

109

108

673

Operatingrevenue

Fixed and variable rent of the six the b hotels (full year)
the b
the b
the b
akasakasuidobashi
ikebukuro
mitsukeFixed (*1)

(Unit: millions of yen)the bochanomizu

the bhachioji

the bhakata

Total

69

122

88

719

84

136

217

Variable

40

174

168

46

100

133

663

Total

125

310

386

115

222

222

1,382

(*1) Fixed rent includes rent from non-hotel tenant(s).
(*2) Please refer to “<Reference Materials 2> <3> Sales and GOP of the Six the b Hotels” below for thecomparison of sales and GOP of the six the b hotels.
(8) Other hotels subject to variable rent
Variable rent from other hotels subject to variable rent

Smile Hotel Nihombashi Mitsukoshimae
Hotel Vista Kamata Tokyo
Chisun Inn Kamata
Hotel Keihan Universal City
Hotel Sunroute Shinbashi
Hilton Tokyo Bay
Hilton Nagoya
Total(Unit: millions of yen)
Midterm

Full year

18
－
38

18
28
79

Undisclosed (*)

Undisclosed (*)

87

87

Undisclosed (*)

Undisclosed (*)
Undisclosed (*)

－
497

937

(*) Undisclosed since tenants that concluded lease agreements did not agree to disclose rent revenue, etc.

－

14 －

Item

Assumptions

・The following is the breakdown of variable rent and income from management contracts.
<Breakdown of variable rent for the fiscal year ending December 2016 (17th period)>(Unit: millions of yen)

Operatingrevenue

The Five HMJ Hotels
Okinawa Marriott Resort & Spa
ACTIVE-INTER CITY HIROSHIMA
Hotel Centraza Hakata
HOTEL VISTA GRANDE OSAKAThe Six Accor Hotels
The Six the b Hotels
Other seven hotels with variable rent
Total (28 hotels)

Midterm

Full year

1,027
－
135
96
－
1,267
314
497
3,338

3,571
561
300
260
354
2,896
663
937
9,545

(*) For details of variable rent and income from management contract, please refer to page 68, “D. Overview ofthe hotel business (1) Rent structures of hotels with variable rent, management contract or revenue sharing”.
・With respect to real estate leasing expenses, which constitute a major part of the operating expenses, expenses
other than depreciation are calculated based on historical data, and variable factors are reflected in the calculation.
Operating expenses of the Acquired Assets and Asset for Anticipated Acquisition are calculated based on
historical data as provided by previous owners, etc., and variable factors are reflected in the calculation.
・It is assumed that the ¥1,216 million will be recognized as expenses for fixed asset tax, city planning tax andother taxes and public dues.
・In general, fixed asset tax and city planning tax and other taxes and public dues on acquired assets are settled withthe previous owners at the time of acquisition, calculated on a pro rata basis of the holding period. For JHR, such
settlement amount is included in the acquisition price, and it will not be recognized as expenses for the calculation
period. Therefore, the fixed asset tax, city planning tax and other taxes and public dues for CANDEO HOTELS
UENO-KOEN, Hotel Centraza Hakata and the Acquired Assets and Asset for Anticipated Acquisition will not berecognized as expenses for the fiscal year ending December 2016 (17th period). The annual fixed asset tax andcity planning tax and other taxes and public dues for CANDEO HOTELS UENO-KOEN are expected to be ¥23
million, and the annual fixed asset tax and city planning tax and other taxes and public dues for Hotel Centraza
Hakata are expected to be ¥21 million and the annual fixed asset tax and city planning tax and other taxes andOperatingexpensespublic dues for the Acquired Assets and Asset for Anticipated Acquisition are expected to be ¥175 million.
Moreover, the fixed asset tax and city planning tax and other taxes and public dues to be recorded as expenses forthe fiscal year ending December 2016 (17th period) for the nine properties (the five the b hotels, Hotel Francs,
Mercure Yokosuka, Okinawa Marriott Resort & Spa and ACTIVE-INTER CITY HIROSHIMA) acquired in thefiscal year ended December 2015 (16th period) are assumed to be ¥276 million (equivalent for nine months).
・Depreciation is calculated using the straight-line method, and is estimated to be ¥3,358 million, after taking into
consideration the acquisition price of the Acquired Assets and Asset for Anticipated Acquisition (including
incidental costs) as well as the planned capital expenditures (¥2,885 million) (capital expenditure (1) for ¥1,387
million, capital expenditure (2) for ¥710 million, and capital expenditure (3) for ¥788 million)(*) for the fiscal
year ending December 2016 (17th period).
(*) JHR classifies capital expenditures into the following three categories. (1) Capital investment related to renewalof buildings, facilities, and equipment which is required to maintain proper values of properties, (2) capital
investment for fixtures and furniture that are not directly related to building structure or facilities but necessary
for operating hotels, and (3) strategic capital investment for renovating guest rooms, etc. for maintaining/
improving the competitiveness of the hotels.
・Repair expenses for buildings are recognized as expenses in the estimated amount necessary for each operating
period. Please note that the repair expenses of each operating period may differ materially from the forecast
amount for various reasons, such as; (1) Emergency repair expenses may be necessary due to damage to buildings15

from unexpected causes; (2) The amount of repair expenses generally tends to increase in difference over time;and (3) Repair expenses are not required on a regular basis.

－

16 －

Item

Assumptions
・ ¥1,779 million is expected for all non-operating expenses, including interest expense, arrangement fee,

Non-operating
amortization for the following (1) handling fees and (2) derivative instruments (interest rate caps).
expenses・Expenses for issuance of new investment units and secondary offering are amortized over a period of three years
by the straight-line method.
・The balance of interest-bearing debt (sum of loans and investment corporation bonds) was ¥111,558 million as ofJune 30, 2016, and the balance of interest-bearing debt will be ¥125,518 million as of September 30, 2016 afterInterestbearing debt

the completion of acquisitions of the Acquired Assets and acquiring Asset for Anticipated Acquisition and¥125,479 million as of December 31, 2016.
・Loans for the Acquired Assets and Asset for Anticipated Acquisition in the amount of ¥14,000 million are
assumed.
・It is assumed that the contractual repayment of the above-mentioned loans on or after July 1, 2016 in the amountof ¥79 million will be paid by cash on hand.

Issuance ofinvestment
units

・The number of investment units issued as of today (3,761,907 units) is assumed.
・It is assumed that there will be no additional issuance of investment units through to the end of the fiscal year
ending December 2016 (17th period).
・The Kumamoto earthquake, occurred since April 14, 2016, caused damage to part of exterior and facilities ofExtraordinaryloss

Dormy Inn Kumamoto. Expenses for repairing such damage are preliminarily estimated to be ¥90 million. The
expenses are expected to be recorded for the midterm of the fiscal year ending December 2016 and recorded as
extraordinary loss.
・Dividend per unit for the fiscal year ending December 2016 (17th period) is calculated based on the following
assumptions.
Net income¥11,890 million

Use of dividend reserve (negative goodwill)
Loss on retirement of noncurrent assets (*1)
Amortization of fixed-term leasehold of land and asset retirement
obligations (*2)
Adjustment for dilution (*3)

Dividend
per unit¥18 million¥106 million¥611 million

Distributable Amount¥12,626 million

Total number of investment units issued

3,761,907 units

Dividend per unit

¥3,356(*1) Amount recognized as a loss on retirement of noncurrent assets will be appropriated by dividend reserve(negative goodwill) and is expected to have no impact on dividend per unit.
(*2) As Hotel Centraza Hakata is a property subject to a fixed-term leasehold of land, amortization, etc. of the
fixed-term leasehold rights of land and asset retirement obligations (hereinafter collectively called the“amortization of land leasehold rights, etc.”) will arise. The amount for amortization of land leasehold
rights, etc. is expected to be added to the dividends through appropriation of the dividend reserve.
(*3) Although dilution of investment units due to the issuance of new investment units for the Acquired Assets andAsset for Anticipated Acquisition is expected, allocation of reserve for dividend from negative goodwill isplanned to avoid the impact of said dilution on dividend per unit for fiscal year ending December 2016.
・Dividend per unit may fluctuate due to various causes, such as fluctuation of rent revenue resulting fromtransfer of assets under management, change of tenants at hotels, change in the business environment for hotelbusiness, unexpected repairs, and actual number of new units issued.
・The balance of the dividend reserve (negative goodwill) after the appropriation of the dividend reserve (negative
goodwill) for dividends for the fiscal year ending December 2016 (17th period) is expected to be ¥13,131
million.

17

Item

Assumptions
・The operating status for the fiscal year ending December 2016 of Hotel Centraza Hakata, acquired on April 1,
2016, and the Acquired Assets and Asset for Anticipated Acquisition is estimated as follows.
<Hotel Centraza Hakata>(Unit: millions of yen)
Fiscal year ending December

Annualized (*3)

2016
Operating days

275 days

366 days

Operating revenue

560

726

NOI (*1)

381

470

-

6.5

NOI yield (%) (*2)
<HOTEL VISTA GRANDE OSAKA>(Unit: millions of yen)
Fiscal year ending December
2016

Operating days

Annualized (*3)

153 days

366 days

Operating revenue

594

1,411

NOI (*1)

592

1,367

-

5.1

NOI yield (%) (*2)
<HOTEL ASCENT FUKUOKA>(Unit: millions of yen)
Fiscal year ending December

Acquired

Annualized (*3)

2016

Assets andAsset for

Operating days

AnticipatedAcquisition

135 days

366 days

Operating revenue

129

351

NOI (*1)

112

274

-

5.6

NOI yield (%) (*2)(*) Operating revenue of HOTEL ASCENT FUKUOKA includes fixed rent calculated based on the lease contracts
with respect to retail facilities other than hotel.

<Hilton Nagoya>(Unit: millions of yen)
Fiscal year ending December

Annualized (*3)

2016
Operating days

122 days

366 days

Operating revenue

471

1,511

NOI (*1)

257

763

-

5.0

NOI yield (%) (*2)(*) Operating revenue of Hilton Nagoya includes fixed rent calculated based on the lease contracts with respect toretail facilities and offices other than hotel.

(*1) NOI = Real estate operating revenue – Real estate operating costs + Depreciation + Loss on retirement of
noncurrent assets + asset retirement obligations expenses(*2) NOI yield = NOI ÷ (Anticipated) acquisition priceNOI yields of Hotel Centraza Hakata and the Acquired Assets and Asset for Anticipated Acquisition for the
fiscal year ending December 2016 are not indicated as these are acquisitions in the middle of the period.
(*3) For the assumptions of calculating the annualized effect, please refer to “<Reference Materials 3>
Assumptions of the forecast of the annualized effect” below.

－

18 －

Item

Assumptions

Dividend perunit resulting ・It is assumed that the excess of earnings (dividend per unit resulting from excess of earnings) will not befrom excess of
distributed.
earnings
・It is assumed that revision in law, tax system, accounting standard, regulations of the listing, regulations of The
Other

Investment Trusts Association, Japan that may impact the forecast above will not be made.
・It is assumed that unexpected major incident will not occur in the general economy, real estate market and hotelbusiness environment, etc.
・The numerical values are rounded down to the nearest millions of yen in the assumptions above.

19

<Reference Materials 1> Highlights of the operating forecast and forecast of dividend
Comparison with the operating forecast (previous forecast) announced in the “Notice Concerning Revision of Operating
Forecast for Fiscal Year Ending December 2016 (17 th Period)” dated July 7, 2016 and major factors causing the variancewith the previous forecast on annualized effect.
(millions of yen)Comparison
with Previous
Forecast

17th Period
Previous Forecast (*1)

Properties

Forecast This Time

Annualized（A）

Annualized
(*2)

（B）

(B)-(A)

No. of properties

41

41

41

41

-

-

Acquisition price286,801

286,801

286,801

286,801--

Operating revenue

22,09524,35722,281

24,567186

0.8%Real estate
operating revenue

22,09524,35722,281

24,567

186

0.8%

(9)

(0.1%) Decrease in utilities income, etc. -JPY22M

195

Increase in variable rent, income frommanagement contracts, and revenue sharing:
2.1% The HMJ Group Hotels JPY96M, the Six Accor
Hotels JPY70M, the Six the b Hotels JPY23M, andothers.

Fixed rent

Variable rent

Composition

Composition

Composition

Increase in fixed rent, etc. JPY13M

Composition

57.7% 12,745 56.6% 13,774 57.2% 12,736 56.1% 13,778

42.3%

9,349 43.4% 10,582 42.8%

9,545 43.9% 10,788

Profitand
Loss

Gain on sale ofreal estate properties

-

-

-

-

-

0.9%

NOI (*3)

18,742

20,17818,91820,378175

NOI yield

6.5%

7.0%

6.6%

7.1%

0.1%

NOI after depreciation(*3)

15,402

16,581

15,541

16,744139

NOI yield after
depreciation

5.4%

5.8%

5.4%

5.8%

0.0%

Operating income

13,621

14,637

13,76014,800139

1.0%

Net income

11,751

12,86911,89013,008139

1.2%

0.9% Increase in operating expenses: JPY47M

730

155

736

160

5

0.7%

Total dividends

12,482

13,023

12,624

13,166142

1.1%

No. of units issued

3,761,907

3,761,907

3,761,907

3,761,907

-

-

3,318

3,462

3,356

3,500

38

1.1%

Use of negative goodwill

Dividend

Factors for the variance

Variance

Dividend per unit (JPY)

Operating forecast for the fiscal year ending December 2016 (17th period) announced in “Notice Concerning Revision of Operating Forecast for
Fiscal Year Ending December 2016 (17th Period)” dated July 7, 2016 and annualized effect based on “<Reference Materials 3> Assumptions of
the forecast of annualized effect” in the same press release.
(*2) For the assumptions of the forecast (this time) of the annualized effect (hypothetical result), please refer to “<Reference Materials 3 >Assumptions of the forecast of the annualized effect” below. The annualized effect is shown for reference purpose only calculated based on theassumption that if the asset acquired and asset anticipated to be acquired during the Fiscal Year Ending December 2016 (17th Period) arecontributed for a full year basis, and does not represent any forecasts for the operating status and dividend of JHR in a specific calculation period.
(*3) Each is calculated using the following formula.
NOI (Net Operating Income) = Real estate operating revenue – Real estate operating costs + Depreciation + Loss on retirement of noncurrent
assets + Asset retirement obligations expenses
NOI yield = NOI ÷ (Anticipated) acquisition price
NOI after depreciation = Real estate operating revenue – Real estate operating costs
NOI yield after depreciation = NOI after depreciation ÷ (Anticipated) acquisition price
(*1)

－

20 －

<Reference Materials 2>
Of the hotels that have adopted variable rent, the following presents sales and GOP of the HMJ group hotels, the six Accor hotels andthe six the b hotels. The numerical figures are based on figures obtained from hotel lessees, etc. Please note that these numbers havenot been audited or gone through other procedures. No guarantee is made as to the accuracy or completeness of the numbers andinformation. Sales and GOP are rounded off to the nearest millions of yen. Comparison with the previous period is rounded off to one
decimal place.
<1> Sales and GOP of the HMJ Group Hotels(1) Hotel sales (by hotel)(Unit: millions of yen)
FY 2015(Fiscal year ended
December 2015)
Sales of the HMJ Group Hotels

First half of the year
Kobe Meriken Park
Oriental Hotel

Oriental Hotel tokyo bay

Namba Oriental Hotel

Hotel Nikko Alivila

Oriental Hotel Hiroshima

Total of the Five HMJ
Hotels

FY 2016(Fiscal year ending December 2016)

Forecast
Comparison
this time Comparison Comparison
withPrevious First half:with thewith
Actualprevious
forecast
actualprevious
previous
periodSecond half: forecast
periodforecast
2,424(0.0%)
2,646
2,465(6.9%)
1.7%

Second half of the year

2,828

1.1%

3,204

2,961

(7.6%)

4.7%

Full year

5,252

0.6%

5,850

5,426

(7.2%)

3.3%

First half of the year

3,395

0.9%

3,500

3,454

(1.3%)

1.7%

Second half of the year

3,927

2.2%

4,045

3,976

(1.7%)

1.3%

Full year

7,322

1.6%

7,544

7,431

(1.5%)

1.5%

First half of the year

1,189

19.1%

1,358

1,386

2.1%

16.6%

Second half of the year

1,341

16.6%

1,474

1,531

3.9%

14.1%

Full year

2,530

17.8%

2,832

2,917

3.0%

15.3%

First half of the year

2,377

8.6%

2,554

2,421

(5.2%)

1.8%

Second half of the year

3,571

8.2%

3,709

3,723

0.4%

4.3%

Full year

5,948

8.3%

6,264

6,144

(1.9%)

3.3%

First half of the year

991

(5.2%)

1,062

1,025

(3.5%)

3.4%

Second half of the year

1,142

(3.0%)

1,135

1,147

1.0%

0.4%

Full year

2,134(4.0%)

2,197

2,171

(1.2%)

1.8%

First half of the year

10,376

3.5%

11,121

10,751(3.3%)

3.6%

Second half of the year

12,810

4.4%

13,566

13,338(1.7%)

4.1%

Full year

23,186

4.0%

24,68824,089(2.4%)

3.9%

First half of the year

1,614

0.9%

1,696

1,607

(5.2%)(0.4%)

Second half of the year

2,402

8.7%

2,505

2,462

(1.7%)

2.5%

Full year

4,016

5.4%

4,201

4,068

(3.2%)

1.3%

1,346

(1.0%)

1,356

1,369

0.9%

1.7%

1,502

(0.6%)

1,514

1,505

(0.5%)

0.3%

2,847
1,124

(0.8%)
2.0%

2,870
1,124

2,874

0.2%

0.9%

First half of the year

1,155

2.8%

2.8%

Second half of the year

1,205

6.6%

1,192

1,228

3.0%

1.8%

Full year

2,330

4.4%

2,316

2,383

2.9%

2.3%

First half of the year

832

47.9%

1,110

1,110

0.0%

33.5%

HOTEL VISTA GRANDE
Second half of the year
OSAKA
Full year

1,133

57.6%

1,180

1,180

0.0%

4.1%

1,965

53.4%

2,290

2,290

0.0%

16.6%

First half of the year

15,291

4.4%

16,407

15,991(2.5%)

4.6%

Total of HMJ Group Hotels Second half of the year

19,053

6.8%

19,957

19,713(1.2%)

3.5%

34,343

5.7%

36,36435,704(1.8%)

4.0%

Okinawa Marriott
Resort & Spa

First half of the year
Sheraton Grand Hiroshima
Second half of the year
Hotel
Full year
Hotel Centraza Hakata

Full year(*1) Although Okinawa Marriott Resort & Spa was acquired on July 10, 2015 and ACTIVE-INTER CITY HIROSHIMA (Sheraton Grand Hiroshima Hotel) was
acquired on December 18, 2015, the figures for the fiscal year ending in December 2015 are for the entire year including prior to the acquisition.

21

(*2) Hotel Centraza Hakata was acquired on April 1, 2016. The figures for the fiscal year ended December 2015 and the fiscal year ending December 2016 arefor the entire year including prior to the acquisition.
(*3) HOTEL VISTA GRANDE OSAKA was acquired on August 1, 2016. The figures for the fiscal year ended December 2015 and the fiscal year ending
December 2016 are for the entire year including prior to the acquisition.
(*4) Renovation of HOTEL VISTA GRANDE OSAKA was completed by the previous owner in March 2014. The number of guest rooms has increased from 304
to 314. Therefore, the numbers of guest rooms available for sale in the first half or full year of 2015 and the first half or full year of 2014 are different.

(2) Hotel GOP(Unit: millions of yen)
FY 2015(Fiscal year ended
December 2015)
GOP of the HMJ Group Hotels

Total of the Five HMJ
HotelsOkinawa Marriott
Resort & Spa
Sheraton Grand
Hiroshima Hotel
Hotel Centraza Hakata
HOTEL VISTAGRANDE OSAKA
Total of the HMJ Group
Hotels

GOP
Ratio of GOP to sales
GOP
Ratio of GOP to sales
GOP
Ratio of GOP to sales
GOP
Ratio of GOP to sales
GOP
Ratio of GOP to sales
GOP
Ratio of GOP to sales

FY 2016(Fiscal year ending December 2016)

ActualComparison
with previous
periodPrevious
forecast

Forecast
this time

6,941
29.9%
1,230
30.6%
716
25.1%
715
30.7%
1,309
66.6%
10,912
31.8%

10.1%
1.7%
11.3%
1.6%
10.0%
2.5%
8.7%
1.2%
73.1%
7.6%
15.2%
2.6%

7,558
30.6%
1,313
31.2%
766
26.7%
714
30.8%
1,553
67.8%
11,905
32.7%

7,553
31.4%
1,324
32.5%
813
28.3%
788
33.1%
1,553
67.8%
12,031
33.7%

Comparison Comparison
with thewithprevious
previous
forecast
period
(0.1%)
8.8%
0.7%
1.4%
0.9%
7.7%
1.3%
1.9%
6.0%
13.5%
1.6%
3.1%
10.3%
10.1%
2.2%
2.3%
0.0%
18.6%
0.0%
1.2%
1.1%
10.3%
1.0%
1.9%

(*1) Although Okinawa Marriott Resort & Spa was acquired on July 10, 2015 and ACTIVE-INTER CITY HIROSHIMA (Sheraton Grand Hiroshima Hotel）was
acquired on December 18, 2015, the figures for the fiscal year ending in December 2015 are for the entire year including prior to the acquisition(*2) Hotel Centraza Hakata was acquired on April 1, 2016. The figures for the fiscal year ended December 2015 and the fiscal year ending December 2016 arefor the entire year including prior to the acquisition.
(*3) HOTEL VISTA GRANDE OSAKA was acquired on August 1, 2016. The figures for the fiscal year ended December 2015 and the fiscal year ending
December 2016 are for the entire year including prior to the acquisition.

－

22 －

<2> Sales and GOP of the Six Accor Hotels(1) Hotel sales (by hotel)(Unit: millions of yen)
FY 2015(Fiscal year ended
December 2015)
Sales of the Six Accor Hotels
Actualibis Tokyo Shinjuku

ibis Styles Kyoto
Stationibis Styles Sapporo

Mercure Sapporo

Mercure Okinawa
Naha

Mercure Yokosuka

Total

Comparison
with previous
periodFY 2016(Fiscal year ending December 2016)

Previous
forecast

Forecast thistimeFirst half:
actualSecond half:
forecast

Comparison
Comparison
with thewith previous
previous
periodforecast

First half of the year

453

6.1%

435

406

(6.7%)(10.3%)

Second half of the year

421

(5.5%)

440

454

3.2%

8.0%

Full year

873

0.2%

875

860

(1.7%)(1.5%)First half of the year

357

17.1%

429

464

8.1%

30.0%

Second half of the year

457

18.8%

500

512

2.3%

12.0%

Full year

814

18.0%

930

976

5.0%

19.9%

First half of the year

429

7.9%

482

490

1.7%

14.3%

Second half of the year

591

13.1%

647

662

2.3%

12.0%

Full year

1,019

10.9%

1,128

1,151

2.1%

12.9%

First half of the year

499

17.5%

562

546

(2.9%)

9.3%

Second half of the year

672

17.4%

756

759

0.4%

12.8%

Full year

1,172

17.4%

1,318

1,305

(1.0%)

11.3%

First half of the year

407

12.1%

484

489

1.0%

20.2%

Second half of the year

516

24.5%

572

560

(2.2%)

8.5%

Full year

923

18.7%

1,056

1,049

(0.7%)

13.7%

First half of the year

550

1.0%

580

569

(1.9%)

3.5%

Second half of the year

512

4.3%

517

521

0.9%

1.9%

Full year

1,062

2.6%

1,097

1,091

(0.6%)

2.7%

First half of the year

2,696

9.5%

2,973

2,965

(0.3%)

10.0%

Second half of the year

3,168

12.0%

3,432

3,467

1.0%

9.4%

Full year

5,863

10.8%

6,405

6,432

0.4%

9.7%

(*) Although Mercure Yokosuka was acquired on April 2, 2015, the figures for the fiscal year ended December 2015 are the figures for the entire year including
prior to the acquisition.

(2) Hotel GOP(Unit: millions of yen)

GOP of the Six Accor Hotels

FY 2015(Fiscal year ended
December 2015)
Comparison
withActualprevious
periodFY 2016(Fiscal year ending December 2016)
Previous
forecast

Forecast
this time

Comparison Comparison
with thewithprevious
previous
forecast
periodTotal of the Six Accor Hotels

2,512

21.0%

2,882

2,955

2.5%

17.6%

Ratio of GOP to sales

42.8%

3.6%

45.0%

45.9%

0.9%

3.1%

(*) Although Mercure Yokosuka was acquired on April 2, 2015, the figures for the fiscal year ended December 2015 are for the entire year including prior to theacquisition.

23

<3> Sales and GOP of the Six the b Hotels(1) Hotel sales (by hotel)(Unit: millions of yen)
FY 2015(Fiscal year ended
December 2015)

Forecast thistimeComparison Comparison
Comparison
Previous First half:with thewithwith previous
forecast
actualprevious
previous
periodSecond half: forecast
periodforecast

Sales of the Six the b Hotels
Actualthe b akasaka-mitsuke

the b ikebukuro

the b ochanomizu

the b hachioji

the b hakata

Total of theFive the b Hotels

the b suidobashi

Total of the
Six the b Hotels

FY 2016(Fiscal year ending December 2016)

First half of the year

221

69.4%

250

242

(3.3%)

9.4%

Second half of the year

242

13.8%

271

263

(3.0%)

8.7%

Full year

464

35.0%

522

506

(3.1%)

9.0%

First half of the year

301

7.7%

335

323

(3.8%)

7.3%

Second half of the year

324

14.5%

350

348

(0.3%)

7.5%

Full year

625

11.1%

685

671

(2.0%)

7.4%

First half of the year

132

9.0%

145

131

(9.4%)(0.8%)

Second half of the year

130

4.8%

149

140

(6.0%)

7.5%

Full year

262

6.9%

294

271

(7.7%)

3.3%

First half of the year

267

10.4%

300

291

(3.1%)

9.0%

Second half of the year

291

13.8%

316

307

(3.0%)

5.3%

Full year

558

12.2%

616

597

(3.1%)

7.1%

First half of the year

191

10.9%

202

230

13.8%

20.6%

Second half of the year

215

12.8%

218

244

11.8%

13.2%

Full year

406

11.9%

420

473

12.7%

16.6%

First half of the year

1,111

17.7%

1,233

1,216

(1.3%)

9.4%

Second half of the year

1,203

12.8%

1,304

1,302

(0.2%)

8.2%

Full year

2,315

15.1%

2,537

2,518

(0.7%)

8.8%

First half of the year

－

－

182

177

(2.9%)－

Second half of the year

－

－

189

187

(1.4%)－

Full year

－

－

372

364

(2.1%)－First half of the year

－

－

1,415

1,394

(1.5%)－

Second half of the year

－

－

1,494

1,489

(0.3%)－

Full year

－

－

2,909

2,882

(0.9%)－(*1) Although the five the b hotels were acquired on January 30, 2015, the figures for the fiscal year ended December 2015 are the figures for the entire year
including prior to the acquisition.
(*2) The b akasaka-mitsuke completed its renovation work by the previous owner in April 2014. The number of guest rooms has increased from 91 to 122.
Therefore, the numbers of guest rooms available for sale in the first half or full year of 2015 and the first half or full year of 2014 are different.
(*3) The b suidobashi was rebranded from Dormy Inn Suidobashi on July 1, 2015. Therefore, no figures are indicated for the fiscal year ended December 2015
and comparison with the previous period for the fiscal year ending December 2016.

－

24 －

(2) Hotel GOP(Unit: millions of yen)
FY 2015(Fiscal year ended December
2015)
GOP of the Five the b Hotels
Actual

FY 2016(Fiscal year ending December 2016)

Comparison
with previous
periodPrevious
forecast

Forecast thistimeComparison Comparison
with thewithprevious
previous
forecast
periodTotal of the Five the b Hotels

1,079

26.4%

1,215

1,240

2.1%

15.0%

Ratio of GOP to sales

46.6%

4.2%

47.9%

49.3%

1.4%

2.6%

(Unit: millions of yen)
FY 2015(Fiscal year ended December
2015)
GOP of the Six the b Hotels
Actual

FY 2016(Fiscal year ending December 2016)

Comparison
with previous
periodPrevious
forecast

Forecast thistimeComparison Comparison
with thewithprevious
previous
forecast
periodTotal of the Six the b Hotels

－

－

1,395

1,421

1.8%

－

Ratio of GOP to sales

－

－

48.0%

49.3%

1.3%

－

(*1) Although the five the b hotels were acquired on January 30, 2015, the figures for the five the b hotels for the fiscal year ended December 2015 are for theentire year including prior to the acquisition.
(*2) The b suidobashi was rebranded from Dormy Inn Suidobashi on July 1, 2015. Therefore, no figures for the six the b hotels are indicated for the fiscal year
ended December 2015 and comparison with the previous period for the fiscal year ending December 2016.

<Reference Materials 3> Assumptions of the forecast of annualized effect(1) The operating revenue and operating expenses for existing properties (properties other than CANDEO HOTELS UENO-KOEN,
Hotel Centraza Hakata and the Acquired Assets and Asset for Anticipated Acquisition) remain unchanged, except for fixed asset
tax and city planning tax and other taxes and public dues from “Assumptions of the operating forecast for the full year of the
fiscal year ending December 2016 (17th period)” above.
(2) The fixed rent for CANDEO HOTELS UENO-KOEN and HOTEL ASCENT FUKUOKA is assumed to be ¥648 million
including the retail facilities.
(3) The annual fixed rent and annualized variable rent for Hotel Centraza Hakata is calculated as follows.
Annual rent for the fiscal year ending December 2016 (17th period) (¥726 million) = Fixed rent (¥400 million) + Variable rent
Variable rent = [ (a) Hotel GOP – (b) GOP base amount ] × 90.0%(Unit: millions of yen)

Full year

Hotel GOP(a)

GOP base amount(b)

Variable rent((a)－(b))×90.0%

787

425

326

(4) The annual fixed rent and annualized variable rent for HOTEL VISTA GRANDE OSAKA are calculated as follows.
Annual rent for the fiscal year ending December 2016 (17th period) (¥1,411 million) = Fixed rent (¥576 million) + Variable rent
Variable rent = [ (a) Hotel GOP – (b) GOP base amount ] × 92.5%(Unit: millions of yen)

Full year

Hotel GOP(a)

GOP base amount(b)

Variable rent((a)－(b))×92.5%

1,553

650

835

(5) The annualized variable rent of Hilton Nagoya is the variable rent based on hotel sales in consideration of the impact ofrenovation of guest rooms (end of suspension of sales due to renovation construction and increase in ADR(*) due to therenovation of guest rooms) during the fiscal year ending December 2016. The annual fixed rent for the retail facilities and offices
is assumed to be ¥104 million.
(6) For the fixed asset tax, city planning tax and other taxes and public dues for the relevant period, the fixed asset tax and city
planning tax and other taxes and public dues for the nine properties (the five the b hotels, Hotel Francs, Mercure Yokosuka,

25

Okinawa Marriott Resort & Spa and ACTIVE-INTER CITY HIROSHIMA) acquired in the fiscal year ended December 2015
(16th period) are assumed to be ¥364 million (for twelve months), and the fixed asset tax and city planning tax and other taxes
and public dues for CANDEO HOTELS UENO-KOEN and Hotel Centraza Hakata, acquired in the fiscal year ending December
2016 (17th Period) are assumed to be ¥23 million (for twelve months) and ¥21 million (for twelve months), respectively. The
fixed asset tax and city planning tax and other taxes and public dues for the Acquired Assets and Asset for AnticipatedAcquisition are assumed to be ¥175 million (for twelve months).
(7) For non-operating expenses, borrowing costs, expenses incurred in the issuance of new investment units and others is assumed
on an annualized basis (twelve months). However, the major financial costs expensed all at once upon property acquisition are
not included in the annualized effect.
(8) The extraordinary loss of ¥90 million for the repair expenses for Dormy Inn Kumamoto relating to the damage from the
Kumamoto earthquake is not included in the annualized effect.
(*) ADR: Represents average daily rate, which is calculated by dividing total rooms revenue for a certain period by the total
number of rooms sold during the period.

＜Reference Materials 4＞ Annualized ADR Sensitivity Analysis (*1)
For the 28 properties with variable rent or management contracts, including the Acquired Assets and Asset for AnticipatedAcquisition, the sensitivity of annualized NOI and dividend per unit to increases and decreases in the ADR forecasted this time is asfollows.

(*1)

(*2)

(*3)

Assumed ADR
Increase/decrease (%)(30.0%)(20.0%)(10.0%)

±0%

10.0%

20.0%

30.0%

NOI (JPY1M)
Increase/decrease (%)(5,491)(26.9%)(3,754)(18.4%)(1,910)(9.4%)

0
0.0%

1,890
9.3%

3,731
18.3%

5,571
27.3%

Dividend per unit (JPY)
Increase/decrease (%)(1,428)(40.8%)(976)(27.9%)(497)(14.2%)

0
0.0%

491
14.0%

970
27.7%

1,449
41.4%

The annualized effect is shown for reference purpose only calculated based on the assumption that the Acquired Assets and Asset for AnticipatedAcquisition contributed on a full year basis, and does not represent any forecasts for the operating status and dividend of JHR in a specificcalculation period.
Change in hotel sales and hotel GOP caused by change in ADR is assumed based on historical results etc. of hotels owned by JHR. NOI anddividend per unit are calculated based on calculation of the variable rent and income from management contracts with assumed hotel sales and
GOP of JHR above.
NOI is rounded off to the nearest millions of yen. Increase/decrease is rounded off to one decimal place.

－

26 －

3. Semi-annual financial statements(1) Semi-annual balance sheets(thousands of yen)
As ofDecember 31, 2015
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Income taxes receivable
Other current assets
Total current assets
Noncurrent assets
Property and equipment, at cost
Machinery and equipment
Accumulated depreciation
Machinery and equipment, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Construction in progress
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Construction in progress in trust
Net property and equipment
Intangible assets
SoftwareLeasehold rights in trust
Fixed-term leasehold rights in trust
Other intangible assets
Total intangible assets
Investments and other assets
Security deposits
Leasehold and security deposits in trust
Long-term prepaid expenses
Derivative assets
Reserve for repairs and maintenanceTotal investments and other assets
Total noncurrent assets
Deferred assets
Investment unit issuance costs
Investment corporation bond issuance costs

27

As of
June 30, 2016

5,450,696
8,247,600
1,269,572
410,241
245,509
3,057
6,473
15,633,151

8,617,983
7,587,589
1,196,937
461,976
15,265
17,879,752

184,717(68,766)
115,951
1,428,232(637,865)
790,3672,676*1 88,642,547(9,276,696)
79,365,851
2,006,145(172,064)
1,834,081
456,282(52,883)
403,399
125,266(68,340)
56,926
120,918,641
606
203,488,501

197,169(81,347)
115,822
1,746,544(749,525)
997,018755*1 93,367,410(10,650,407)
82,717,002
2,026,363(204,861)
1,821,502
490,212(63,581)426,631
137,266(73,082)
64,184
125,849,630
1,794
211,994,342

100,333
19,774,039
10,476
19,884,849

141,652
19,774,039
5,374,419
10,13625,300,247

12,520158,323
993,340
1,272
49,2191,214,676
224,588,027

12,520158,323
2,958,959
1,721
56,174
3,187,699
240,482,289

66,92868,381

72,81680,688

Total deferred assets
Total assets

135,310240,356,489

－

28 －

153,505
258,515,547

(thousands of yen)
As ofDecember 31, 2015
Liabilities
Current liabilities
Operating accounts payable
Short-term loans payable
Current portion of investment corporation bonds
Current portion of long-term loans payable
Accrued expenses
Income taxes payable
Consumption taxes payable
Advances received
Allowance for loss on disaster
Dividends payable
Deposits received
Other current liabilities
Total current liabilities
Long-term liabilities
Investment corporation bonds
Long-term loans payable
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Derivative liabilities
Asset retirement obligations
Other
Total long-term liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
SurplusCapital surplus
Voluntary reserve
Dividend reserve
Total voluntary reserve
Unappropriated retained earnings (undisposed loss)
Total surplus
Total unitholders’ equity
Valuation and translation adjustments
Deferred gains (losses) on hedges
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

*2

29

As of
June 30, 2016

875,465
9,000,000
2,500,000
11,393,603
500,859
1,210
692,794
12,381
71,44225,45225,073,210

314,680
8,700,000
2,500,000
633,750
479,478605
113,020
763,502
90,00018,21545,81058,505
13,717,569

9,500,000
70,379,000
2,041,032
2,914,912
533,856
85,368,801
110,442,012

12,500,000
87,224,750
1,048,032
3,175,454
1,290,965
327,957
2
105,567,162
119,284,731

85,470,541

100,088,808

21,746,398

21,746,398

13,928,075
13,928,075
9,296,121
44,970,596
130,441,137

13,867,228
13,867,228
4,780,924
40,394,551
140,483,359(526,660)(526,660)
129,914,477
240,356,489(1,252,543)(1,252,543)
139,230,816
258,515,547*2

(2) Semi-annual statements of income(thousands of yen)

Operating revenue
Real estate operating revenue
Other real estate operating revenue
Gain on investment in silent partnership
Total operating revenue
Operating expenses
Real estate operating costs
Asset management fee
Asset custody fee
Administrative service fee
Directors’ compensation
Other operating expenses
Total operating expenses
Operating income
Non-operating income
Interest income
Gain on forfeiture of unclaimed dividends
Gain on insurance claims
Interest on tax refunds
Gain on derivative instruments
Total non-operating income
Non-operating expenses
Interest expense
Interest expense on investment corporation bonds
Borrowing costs
Amortization of investment corporation bond issuance costs
Amortization of investment unit issuance costs
Loss on derivative instruments
Other
Total non-operating expenses
Ordinary income
Extraordinary loss
Provisions for loss on disaster
Total extraordinary loss
Income before income taxes
Income taxes – current
Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)－

For the six months ended
June 30, 2015

For the six months ended
June 30, 2016

*1 7,048,534*1 189,846
4,288
7,242,669*1 8,955,104*1 435,866
9,390,971*1, *230 －

2,362,448
475,961
8,470
43,7674,800
89,9342,985,382
4,257,286*1, *2

2,985,368
581,912
9,929
44,5797,200
79,1603,708,149
5,682,822

1,404
429
278
177
7,638
9,927

1,836
2,296
52
219
4,405

452,549
26,692273,997
5,723
25,3119,981
45794,300
3,472,913

424,059
59,026271,160
9,217
23,021
30,7791,327
818,592
4,868,635

3,472,913
605
605
3,472,308
1,444
3,473,753

90,00090,0004,778,635
605
605
4,778,030
2,894
4,780,924

(3) Semi-annual statements of changes in net assets
For the six months ended June 30, 2015
(thousands of yen)
Unitholders’ equity
Surplus
Unitholders’capitalBalance, January 1, 2015

59,024,923

Voluntary reserve
Capitalsurplus21,746,398

Dividend
reserve

Total
voluntary
reserve

14,168,614

14,168,614

Unappropriatedretainedearnings(undisposed
loss)
5,776,116

Total
unitholders’equityTotal
surplus41,691,129

100,716,052

Changes of items during the period:
Issuance of new investment units

26,152,715

26,152,715

Reversal of dividend reserve

240,538--

Dividends paid

(6,015,210)(6,015,210)(6,015,210)

Net income

3,472,308

3,472,308

3,472,308

Net changes of items
other than unitholders’ equity
Total changes of items
during the period
Balance, June 30, 2015

(240,538)

26,152,715-(240,538)(240,538)(2,302,363)(2,542,901)

23,609,814*1
85,177,639

21,746,398

13,928,075

13,928,075

3,473,753

39,148,227

124,325,866(thousands of yen)
Valuation and translation
adjustments
Total
Total
Deferred
net assets
valuation andgains (losses)
translation
on hedges
adjustments
Balance, January 1, 2015

(373,144)(373,144)

100,342,908

Changes of items during the period:
Issuance of new investment units

26,152,715

Reversal of dividend reserve-

Dividends paid

(6,015,210)

Net income

3,472,308

Net changes of items
other than unitholders’ equity
Total changes of items
during the period
Balance, June 30, 2015

(240,538)

119,066

119,066

119,066

119,066

119,066

23,728,880(254,077)(254,077)

124,071,789

31

For the six months ended June 30, 2016
(thousands of yen)
Unitholders’ equity
Surplus
Unitholders’capitalBalance, January 1, 2016

85,470,541

Voluntary reserve
Capitalsurplus21,746,398

Dividend
reserve

Total
voluntary
reserve

13,928,075

13,928,075

Unappropriatedretainedearnings(undisposed
loss)
9,296,121

Total
unitholders’equityTotal
surplus44,970,596

130,441,137

Changes of items during the period:
Issuance of new investment units

14,618,266

14,618,266

Reversal of dividend reserve

60,847--

Dividends paid

(9,354,075)(9,354,075)(9,354,075)

Net income

4,778,030

4,778,030

4,778,030

Net changes of items
other than unitholders’ equity
Total changes of items
during the period
Balance, June 30, 2016

(60,847)

14,618,266-(60,847)(60,847)(4,515,197)(4,576,044)

10,042,221*1
100,088,808

21,746,398

13,867,228

13,867,228

4,780,924

40,394,551

140,483,359(thousands of yen)
Valuation and translation
adjustments
Total
Total
Deferred
net assets
valuation andgains (losses)
translation
on hedges
adjustments
Balance, January 1, 2016

(526,660)(526,660)

129,914,477

Changes of items during the period:
Issuance of new investment units

14,618,266

Reversal of dividend reserve-

Dividends paid

(9,354,075)

Net income

4,778,030

Net changes of items
other than unitholders’ equity
Total changes of items
during the period
Balance, June 30, 2016

(60,847)(725,882)(725,882)(725,882)(725,882)(725,882)

9,316,338(1,252,543)(1,252,543)

139,230,816

－

32 －

(4) Semi-annual statements of cash flows(thousands of yen)
For the six months ended
June 30, 2015
Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Loss on retirement of noncurrent assets
Loss on derivative instruments
Amortization of investment corporation bond issuance costs
Amortization of investment unit issuance costs
Gain on investment in silent partnership
Increase (decrease) in allowance for the loss on disaster
Interest income
Interest expense
Interest on tax refunds(Increase) decrease in operating accounts receivable(Increase) decrease in prepaid expenses(Increase) decrease in consumption taxes receivable(Increase) decrease in long-term prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accrued expenses
Increase (decrease) in consumption taxes payable
Increase (decrease) in advances received
Increase (decrease) in deposits received
Other – net
SubtotalInterest received
Interest paid
Interest received on tax refunds
Income taxes – refunded (paid)
Net cash provided by operating activities
Cash flows from investing activities
Proceeds from redemption of investment securities
Purchase of property and equipment in trust
Purchase of property and equipment
Purchase of intangible assets
Payments of reserve for repairs and maintenance
Proceeds from tenant leasehold and security deposits in trust
Reimbursements of tenant leasehold and security deposits in trust
Proceeds from tenant leasehold and security deposits
Reimbursements of tenant leasehold and security deposits
Net cash used in investing activities
Cash flows from financing activities
Proceeds from short-term loans payable
Repayments of short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from investment corporation bonds
Proceeds from issuance of investment units
Payments for investment corporation bond issuance costs
Dividends paid
Net cash provided by financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

33*1

For the six months ended
June 30, 2016

3,472,913
1,327,987
1,654
2,343
5,723
25,311(4,288)(1,404)479,241(177)
270,801(20,195)(179,576)
141,956
16,558(154,842)
65,533
139,747(27,133)
5,562,156
1,404(489,668)
177(781)
5,073,288

4,778,635
1,603,918
5,053
30,7799,217
23,02190,000(1,836)
483,085(219)
72,635(51,735)
245,509(1,964,229)(40,710)(8,575)
113,02070,707(25,632)
22,934
5,455,581
1,836(495,890)
219
1,847
4,963,595

607,013(25,510,606)(81,905)(25,572)(41,637)
223,49016(24,829,202)(9,864,929)(384,032)(5,474,180)(6,955)299,878(38,587)
7,000(1,000,000)(16,461,806)

1,000,000
14,400,000(5,004,250)
26,090,283(6,009,696)
30,476,337
10,720,422
14,424,774
25,145,197

8,700,000(9,000,000)
17,400,000(11,314,103)
3,000,000
14,589,356(21,524)(9,348,241)
14,005,487
2,507,276
13,698,296*1 16,205,573

(5) Notes on going concern assumption
Not applicable.

(6) Notes on matters concerning significant accounting policies
1.

Method ofdepreciation andamortization of
noncurrent assets(1) Property and equipment (including trust accounts)
Depreciation of property and equipment is calculated using the straight-line method. The useful
lives of major property and equipment components are as follows:
Machinery and equipment
Tools, furniture and fixtures

2 to 17 years
2 to 20 years

Buildings in trust
Structures in trust

2 to 62 years
2 to 62 years

Machinery and equipment in trust
Tools, furniture and fixtures in trust

4 to 32 years
2 to 27 years(2) Intangible assets
Intangible assets are amortized using the straight-line method. The amortization period of major
intangible assets is as follows.
Software (for internal use)

5 years as internally usable years

Fixed-term leasehold rights in trust is amortized using the straight-line method based on remaining
period (41 years) of the contract.
(3) Long-term prepaid expenses
Long-term prepaid expenses are amortized using the straight-line method.
2.

Accounting fordeferred assets(1) Investment unit issuance costs
Investment unit issuance costs are amortized using the straight-line method over three years.
The issuance of new investment units through public offerings on January 20, 2016 was
consummated under underwriting agreements in which underwriting securities companies
committed to purchase all of the investment units being offered at an issue value and selling them at
an offering price different from such issue value to general investors (the “spread method”).
No underwriting fees were paid by JHR under the spread method since the underwriters werecompensated by the underwriting spread, which amounted to ¥858,900 thousand for the six month
ended June 30, 2015 and ¥466,990 thousand for the six months ended June 30, 2016, representing
the difference between the issue price and the issue value.
(2) Investment corporation bond issuance costs
Investment corporation bond issuance costs are amortized using the interest method over therespective term of the bond.

3.

4.

Standards forrecognition of

Allowance for the loss on disaster
Reasonable estimated amount for the period is posted to prepare for the restoration cost of tangible fixedallowance

assets in accordance with the Kumamoto Earthquake occurred in April 2016.

Standards forrecognition ofTreatment of property taxes and other taxes
For taxes imposed on properties under management such as property taxes, city planning taxes, andrevenues andexpensesdepreciable asset taxes, the imposed amounts are allocated to the respective period and expensed as“Real estate operating costs.”
Cash paid for property taxes and city planning taxes to the transferor of real properties at acquisition is
not recorded as “Real estate operating costs” but capitalized as part of the acquisition cost of the relevant
property.
The amount of such taxes capitalized in the acquisition cost of real properties was ¥143,061 thousand forthe six months ended June 30, 2015 and ¥37,685 thousand for the six months ended June 30, 2016.

－

34 －

5.

Method of(1) Method of hedge accounting

hedge accounting

Deferred hedge accounting is applied(2) Hedging instruments and hedged items
Hedging instruments
Interest rate swaps
Interest rate caps
Hedged items
Interest rates on loans payable(3) Hedging policy
JHR enters into certain derivative transactions in accordance with its financial policy in order tomanage risks, which is provided in the Articles of Incorporation.
(4) Method for assessing hedge effectiveness
JHR evaluates hedge effectiveness by comparing the cumulative changes in cash flow of hedging
instruments and the hedged items and assessing the ratio between the changes.

6.

Scope of funds

Cash and cash equivalents in the semi-annual statements of cash flows consist of cash on hand, cash in(cash and cash
equivalents) in thetrust accounts, bank deposit and trust deposit, which can be withdrawn at any time, and short-term
investments with a maturity of three months or less when purchased, which can easily be converted tosemi-annual
statements of cash

cash and subject to minimal risk of change in value.

flows
7.

Other significant
matters serving as(1) Accounting treatment of beneficial interests in trust with real estate, etc. as their assets
For trust beneficial interests in real estate, etc., all assets and liabilities held in trust accounts as well

the basis for
preparing semi-

as all income generated and expenses incurred from assets in trust are presented in theaccompanying semi-annual balance sheet and income statement accounts accordingly.

annual financial
statements

The following material items of the trust accounts recorded in the relevant accounts are presented
separately on the semi-annual balance sheets.
(a) Cash and deposits in trust(b) Buildings in trust; Structures in trust; Machinery and equipment in trust; Tools, furniture andfixtures in trust; Land in trust; Construction in progress in trust(c) Leasehold rights in trust; Fixed-term leasehold rights in trust; Leasehold and security deposits
in trust(d) Tenant leasehold and security deposits in trust(2) Accounting treatment of consumption taxes
Consumption taxes are excluded from the transaction amounts.

35

(7) Notes to semi-annual financial statements
Disclosure of notes on “securities” and “share of (profit) loss of entities accounted for using equity method” is omitted because
there is thought to be no material necessity for disclosure in the midterm financial report.

[Notes to semi-annual balance sheets]*1. Accumulated advanced depreciation of property and equipment deducted from acquisition costs due to government
subsidies received etc.
As ofDecember 31, 2015
Buildings in trust

As ofJune 30, 2016¥24,921 thousand*2. Minimum net assets as required by Article 67, paragraph 4 of the Investment Trusts Act
As ofDecember 31, 2015¥24,921 thousand

As ofJune 30, 2016

¥50,000 thousand¥50,000 thousand[Notes to semi-annual statements of income]*1. Components of real estate operating revenue and real estate operating costs

A.

For the six months ended
June 30, 2015

(thousands of yen)
For the six months ended
June 30, 2016

4,778,940
1,323,069

5,616,251
2,213,574

Real estate operating revenue
Real estate operating revenue
Fixed rent
Variable rent
Income from management contracts

946,524

7,048,534

1,125,278

8,955,104

Other real estate operating revenue
Parking lots
Other incidental revenue

38,428
10,428

Utilities
Other

120,580
20,409Total real estate operating revenue
B.

189,846

218,328
131,677

7,238,381

435,866
9,390,971

Real estate operating costs
Real estate operating costs
Land lease and other rent expenses
Property taxes

231,617461,310287,175
561,728

Outsourcing expenses (Note)
Nonlife insurance

157,278
15,297

236,669
18,903

1,327,987
1,654

1,603,918
5,053

Repairs
Utilities

19,547
119,288

18,782
221,810

Trust fees
Other21,534
6,931

Depreciation and amortization
Loss on retirement of noncurrent assets

Total real estate operating costs
C.

71,39914,461

Net real estate operating income(A-B)

2,362,448

21,177
10,1492,985,368

2,362,448

2,985,368

4,875,932

6,405,603(Note) Outsourcing expenses include management contract fees of ¥85,063 thousand for the midterm period ended June 30, 2015 and ¥107,464 thousand for themidterm period ended June 30, 2016.

－

36 －

*2. Depreciation was expensed as follows:
For the six months ended
June 30, 2015
Property and equipment
Intangible assets

For the six months ended
June 30, 2016

¥1,318,277 thousand¥9,710 thousand¥1,552,218 thousand¥51,700 thousand[Notes to semi-annual statements of changes in net assets]
For the six months ended
June 30, 2015
*1 Total number of investment units
authorized, and issued and outstanding
Total number of investment units authorized
Total number of investment units issued and outstanding

For the six months ended
June 30, 2016

20,000,000 units
3,140,322 units

20,000,000 units
3,321,907 units[Notes to semi-annual statements of cash flows]*1. Relation of balance of cash and cash equivalents at end of period and the amount in semi-annual balance sheet accounts
For the six months ended
For the six months ended
June 30, 2015
June 30, 2016
Cash and deposits¥18,597,032 thousand¥8,617,983 thousand
Cash and deposits in trust¥6,548,164 thousand¥7,587,589 thousand
Cash and cash equivalents¥25,145,197 thousand¥16,205,573 thousand[Notes on lease transactions]Operating leases (as lessor)
Minimum rental revenue under non-cancellable operating leases
As ofDecember 31, 2015
Due within one year
¥1,788,631 thousand
Due after one year
¥7,565,169 thousand
Total¥9,353,800 thousand

As ofJune 30, 2016
¥1,750,274 thousand¥6,708,573 thousand¥8,458,847 thousand[Notes on financial instruments]
Matters concerning fair value of financial instruments
Carrying amounts of financial instruments on the (semi-annual) balance sheets, their fair values, and the differences were as
follows. Financial instruments whose fair values are considered extremely difficult to measure are not included in the table.
See Note 2 below.
As of December 31, 2015
Carrying amount(JPY1000)Fair value(JPY1000)

Difference(JPY1000)(1) Cash and deposits

5,450,696

5,450,696-(2) Cash and deposits in trust

8,247,600

8,247,600-

Total assets

13,698,296

13,698,296-(3) Short-term loans payable

9,000,000

9,000,000-(4) Current portion of investment corporation bonds

2,500,000

2,507,000

7,000(5) Current portion of long-term loans payable

11,393,603

11,393,603-(6) Investment corporation bonds

9,500,000

9,544,450

44,450(7) Long-term loans payable

70,379,000

70,379,000-

Total liabilities

102,772,603

102,824,053

51,450(532,584)(532,584)-(8) Derivative transactions (*)

37

As of June 30, 2016
Carrying amount(JPY1000)Fair value(JPY1000)

Difference(JPY1000)(1) Cash and deposits

8,617,983

8,617,983-(2) Cash and deposits in trust

7,587,589

7,587,589-

Total assets

16,205,573

16,205,573-(3) Short-term loans payable

8,700,000

8,700,000-(4) Current portion of investment corporation bonds

2,500,000

2,504,500

4,500

633,750

633,750-(6) Investment corporation bonds

12,500,000

12,777,700

277,700(7) Long-term loans payable

87,224,750

87,224,750-

Total liabilities

111,558,500

111,840,700

282,200(8) Derivative transactions (*)(1,289,244)(1,289,244)-(5) Current portion of long-term loans payable(*) Receivables and payables arising from derivative transactions are presented on a net basis and amounts in parenthesis denote net payables.
(Note 1) Methods to measure fair value of financial instruments(1) Cash and deposits; (2) Cash and deposits in trust; (3) Short-term loans payable
The carrying value is deemed to approximate the fair value since the instruments are scheduled to be settled in a short period of time.
(4) Current portion of investment corporation bonds; (6) Investment corporation bonds
The fair value of these instruments is measured based on the market price.
(5) Current portion of long-term loans payable; (7) Long-term loans payable
The carrying value is deemed to approximate the fair value since the interest rate on long-term loans payable are floating interest rates which arerevised periodically to reflect market interest rates.
(8) Derivative transactions
The information on the fair value of derivative transactions is presented in “Notes on derivative transactions” below.
(Note 2) Carrying amount of financial instruments whose fair values are considered extremely difficult to measure(thousands of yen)
As ofDecember 31, 2015

Classification

As ofJune 30, 2016

Tenant leasehold and security deposits

2,041,032

1,048,032

Tenant leasehold and security deposits in trust

2,914,912

3,175,454

Total

4,955,944

4,223,486

Tenant leasehold and security deposits / Tenant leasehold and security deposits in trust
Tenant leasehold and security deposits (in trust) are not subject to fair value disclosure because they have no market priceand their actual deposit periods from a tenant’s move-in to move-out are not estimable, thus making a reasonable estimate of
future cash flows is difficult.

－

38 －

[Notes on derivative transactions]
1. Derivative transactions to which hedge accounting is not applied
As of December 31, 2015
For derivative transactions which hedge accounting is not applied, the contract amount or the amount equivalent to theprincipal provided in the contract, etc. as of the account closing date was as follows:(thousands of yen)Classification

Transactions
other thanmarkettransactions

Type, etc. of
derivative transaction

Contract amount, etc.
Of which, due
after one year

Interest rate swaps(fixed rate payment,
floating rate receipt)

6,794,000

6,794,000

Interest rate caps

848,250

848,250

Fair value

Method to measure the fair value(38,598) The fair value is measured at thequoted price, etc. obtained from thecounterparty financial institutions.
34

As of June 30, 2016
For derivative transactions which hedge accounting is not applied, the contract amount or the amount equivalent to theprincipal provided in the contract, etc. as of the account closing date

was as follows:(thousands of yen)Classification

Transactions
other thanmarkettransactions

Type, etc. of
derivative transaction

Contract amount, etc.
Of which, due
after one year

Interest rate swaps(fixed rate payment,
floating rate receipt)

6,794,000

6,794,000

Interest rate caps

848,250-

Fair value

Method to measure the fair value(60,968) The fair value is measured at thequoted price, etc. obtained from thecounterparty financial institutions.
20

2. Derivative transactions to which hedge accounting is applied
As of December 31, 2015
For derivative transactions which hedge accounting is applied, the contract amount or the amount equivalent to the principal
provided in the contract, etc. as of the account closing date for each method of hedge accounting was as follows:(thousands of yen)
Method ofhedge
accounting

DeferralmethodContract amount, etc.

Type, etc. of
derivative transactionMainhedged item

Interest rate swaps(fixed rate payment,
floating rate receipt)

Long-termloans payable

63,581,950

58,028,750

Interest rate caps

Long-termloans payable

8,565,250

4,286,250

Of which, due
after one year

Fair value

Method to measure
the fair value

The fair value is(495,258) measured at thequoted price, etc.
obtained from the
1,238 counterparty
financial institutions.

As of June 30, 2015
For derivative transactions which hedge accounting is applied, the contract amount or the amount equivalent to the principal
provided in the contract, etc. as of the account closing date for each method of hedge accounting was as follows:(thousands of yen)
Method ofhedge
accounting

Type, etc. of
derivative transactionMainhedged item

DeferralmethodInterest rate swaps(fixed rate payment,
floating rate receipt)

Long-termloans payable

Contract amount, etc.
Of which, due
after one year
76,728,750

39

76,728,750

Fair value

Method to measure
the fair value

The fair value is(1,229,987) measured at thequoted price, etc.

Interest rate caps

Long-termloans payable

4,286,250

4,286,250

obtained from the
1,691 counterparty
financial institutions.

[Notes on asset retirement obligations]
Asset retirement obligations recognized on the balance sheet
1. Outline of the subject asset retirement obligation
JHR recognizes asset retirement obligation as it is obliged to restore the land of Hotel Centraza Hakata, acquired on April 1,
2016, to the original state in accordance with the fixed-term leasehold agreement.
2.

Calculation method of the subject asset retirement obligation
Calculated the amount of asset retirement obligation estimating that the expected useful life is 34 years due to its aging andusing the discount rate of 0.484%.
Increase and decrease of the subject asset retirement obligation.

3.

(thousands of yen)
For the six months ended
June 30, 2016

For the year ended
December 31, 2015―――

327,561

Adjustment due to passage of time―

396

Balance at end of period―

327,957

Balance at beginning of period
Increase due to acquisition of property
and equipment[Notes on rental properties, etc.]
JHR owns rental properties for hotels to earn lease income and income from management contracts. The carrying amounts,changes in such balances, and fair values of such properties were as follows:
For the year ended
December 31, 2015

Use

Hotel

(Note 1)
(Note 2)

(Note 3)Carrying amount
Balance at beginning of period
Net increase (decrease) during period
Balance at end of period
Fair value at end of period

169,847,788
52,514,962
222,362,750
302,110,000(thousands of yen)
For the six months ended
June 30, 2016
222,362,750
14,931,212
237,293,963
343,310,000

For a summary of the applicable rental properties, please refer to “5. Reference information; (2) Assets under management; (C) Other major assets
under management; A. Summary of real estate properties under management” on page 52.
With regards to net increase (decrease) during period, increase during the year ended December 31, 2015 principally represents the acquisition of thefive the b hotels for ¥20,230 million, Hotel Francs for ¥3,181 million, Mercure Yokosuka for ¥1,649 million, Okinawa Marriott Resort & Spa for¥15,094 million and ACTIVE-INTER CITY HIROSHIMA for ¥17,949 million. Decrease during the year ended December 31, 2015 represents thesale of Comfort Hotel Shin-Yamaguchi for ¥787 million, Daiwa Roynet Hotel Akita for ¥1,644 million and Hotel Sunroute Niigata for ¥1,967 million.
Increase during the period ended June 30, 2016 principally represents the acquisition of CANDEO HOTELS UENO-KOEN for ¥6,784 million andHotel Centraza Hakata for ¥7,614 million.
Fair value at end of period is the appraisal value determined by licensed real estate appraisers.

[Notes on segment and related information]
1. Segment information
The segment information has been omitted because JHR has only one segment, which is the investment and management ofhotel real estate.
2. Related information
For the six months ended June 30, 2015(1) Information about products and services
Information about products and services has been omitted because operating revenue from external customers in asingle product/service category accounted for more than 90% of total operating revenue on the semi-annual statements
of income.
(2) Information about geographical areas(i) Operating revenue
Information about geographical areas has been omitted because operating revenue from external customers in Japanaccounted for more than 90% of total operating revenue on the semi-annual statements of income.
－40 －(ii) Property and equipment
Information about property and equipment has been omitted because the amount of property and equipment located inJapan accounted for more than 90% of net property and equipment on the semi-annual balance sheets.
(3) Information about major customers(thousands of yen)
Name of customer

Operating revenue

Name of related segment

Hotel Management Japan Co., Ltd.

2,341,761

Investment and management of hotel real estate

AAPC Japan K.K.

1,067,501

Investment and management of hotel real estate

THE DAI-ICHI BUILDING CO., LTD.

934,200

Investment and management of hotel real estate

For the six months ended June 30, 2016(1) Information about products and services
Information about products and services has been omitted because operating revenue from external customers in asingle product/service category accounted for more than 90% of total operating revenue on the semi-annual statements
of income.
(2) Information about geographical areas(i) Operating revenue
Information about geographical areas has been omitted because operating revenue from external customers in Japanaccounted for more than 90% of total operating revenue on the semi-annual statements of income.
(ii) Property and equipment
Information about property and equipment has been omitted because the amount of property and equipment located inJapan accounted for more than 90% of net property and equipment on the semi-annual balance sheets.
(3) Information about major customers(thousands of yen)
Name of customer

Operating revenue

Name of related segment

Hotel Management Japan Co., Ltd.

2,638,508

Investment and management of hotel real estate

AAPC Japan K.K.

1,348,837

Investment and management of hotel real estate[Notes on per unit information]
The net assets per unit is as follows:

Net assets per unit

As ofDecember 31, 2015
¥41,318

As ofJune 30, 2016
¥41,912For the six months ended
June 30, 2015
¥1,166

For the six months ended
June 30, 2016
¥1,4463,472,308-

4,778,030-

3,472,308

4,778,030

2,976,156

3,302,176

The basis of computation of net income per unit is as follows:

Net income per unit (JPY)[Basis of computation]
Net income for midterm (JPY1000)
Amount not attributable to common unitholders (JPY1000)
Net income for midterm attributable to common investment units(JPY1000)
Average number of investment units during midterm period (units)(Note) Net income per unit for midterm is computed by dividing net income for midterm by the average number of investment units during the midterm period.
Net income per unit for midterm after the adjustment of potentially dilutive units is not presented since there are no potentially dilutive units.

41

[Notes on significant subsequent events]
1.

Acquisition of assets
On August 1, 2016 and August 19, 2016, JHR acquired two assets for ¥31,925 million in total acquisition price as follows.
Property name

HOTEL VISTA GRANDE OSAKA

Asset category

Real estate beneficial interest in trust and movable assets attached to the hotel

Asset type

Hotel

Address

5-15 Soemon-cho, Chuo-ku, Osaka-shi, Osaka

Acquisition dateAugust 1, 2016

SellerGK APOLLO

Acquisition price (Note)¥27,000 million(Note) The acquisition price does not include expenses for acquisition, settlement of property taxes and city planning taxes, and consumption taxes.

Property name

HOTEL ASCENT FUKUOKA

Asset category

Real estate beneficial interest in trust

Asset type

Hotel

Address

3-3-14 Tenjin, Chuo-ku, Fukuoka-shi, Fukuoka

Acquisition dateAugust 19, 2016

SellerGodo Kaisha Tenjin 1

Acquisition price (Note)¥4,925 million(Note) The acquisition price does not include expenses for acquisition, settlement of property taxes and city planning taxes, and consumption taxes.

2. Contract conclusion on acquisition of asset
On July 7, 2016, JHR concluded a purchase and sale agreement regarding acquisition of the following asset.
Name of property for anticipatedacquisition

Hilton Nagoya

Asset category

Real estate beneficial interest in trust

Asset type

Hotel

Address

1-3-3 Sakae, Naka-ku, Nagoya-shi, Aichi

Anticipated acquisition date

September 1, 2016

Planned seller

GK HN Project

Anticipated acquisition price(Note)¥15,250 million(Note) The anticipated acquisition price does not include expenses for acquisition, settlement of property taxes and city planning taxes, and consumption taxes.

－

42 －

3. Execution of the loan agreements
On August 10, 2016, JHR concluded the loan agreements as described below to partly fund the acquisition of the real estate
beneficial interest in trust and movable assets attached to the hotels as stated in “1. Acquisition of assets” and “2. Contractconclusion on acquisition of asset” above.

Planned lenders

Sumitomo Mitsui Banking Corporation / Shinsei Bank, Limited / Mizuho Bank, Ltd. /Resona Bank, Ltd. / The Nomura Trust and Banking Co., Ltd. / The Chiba Bank, Ltd. / The
Bank of Fukuoka, Ltd.

Planned amount of the loan

¥9,500 million

Interest rate

Base interest rate (JBA Japanese Yen TIBOR for one month) + 0.65%

Scheduled date of borrowing

September 1, 2016

Method of principal repayment

Lump-sum payment on the maturity date

Maturity date

September 30, 2025

Collateral

Unsecured/Unguaranteed(2) Term Loan 27
Planned lender

Sumitomo Mitsui Trust Bank, Limited

Planned amount of the loan

¥1,300 million

Interest rate

Base interest rate (JBA Japanese Yen TIBOR for three months) + 0.50%

Scheduled date of borrowing

September 1, 2016

Method of principal repayment

Lump-sum payment on the maturity date

Maturity date

September 30, 2024

Collateral

Unsecured/Unguaranteed(3) Term Loan 28
Planned lender

Mitsubishi UFJ Trust and Banking Corporation

Planned amount of the loan

¥2,000 million

Interest rate

Base interest rate (JBA Japanese Yen TIBOR for three months) + 0.50%

Scheduled date of borrowing

September 1, 2016

Method of principal repayment

Lump-sum payment on the maturity date

Maturity date

September 30, 2024

Collateral

Unsecured/Unguaranteed(4) Term Loan 29
Planned lender

Development Bank of Japan Inc.

Planned amount of the loan

¥700 million

Interest rate

0.59%

Scheduled date of borrowing

September 1, 2016

Method of principal repayment

Lump-sum payment on the maturity date

Maturity date

September 30, 2024

Collateral

Unsecured/Unguaranteed(5) Term Loan 30
Planned lender

Aozora Bank, Ltd.

Planned amount of the loan

¥500 million

Interest rate

To be determined (Fixed interest rate)

Scheduled date of borrowing

September 1, 2016

Method of principal repayment

Lump-sum payment on the maturity date

43

Maturity date

September 30, 2024

Collateral

Unsecured/Unguaranteed

4. Issuance of new investment units
JHR resolved to issue new investment units at the Board of Directors meetings held on July 7, 2016 and July 20, 2016. Payment
for the new investment units was completed on July 27, 2016 and August 23, 2016, and the investment units were issued under
the following terms and conditions. As a result, JHR’s unitholders’ capital increased to ¥134,829,448,209, with the number ofinvestment units issued and outstanding totaling 3,761,907 units.
(a) Issuance of new investment units (domestic public offering and overseas offering)Number of investment units issued:
Of which domestic public offering:

428,260 units
164,260 units

Of which overseas offering:
Issue price:

264,000 units¥81,536 per unit

Total issue price:
Paid-in amount (issue value):¥34,918,607,360¥78,956 per unit

Total paid-in amount (total issue value):
Payment date:¥33,813,696,560
July 27, 2016(b) Issuance of new investment units (third-party allotment)
Number of investment units issued:
11,740 units
Paid-in amount (issue value):
Total paid-in amount (total issue value):¥78,956 per unit
¥926,943,440

Payment date:
Allottee:August 23, 2016
SMBC Nikko Securities Inc.

(c) Use of funds
JHR allocated the proceeds in the amount of ¥33,813,696,560 procured from the domestic public offering and overseas
offering to cash on hand in order to complement part of a decrease in cash on hand, which is a decrease that occurred when
JHR had used cash on hand to partly fund the acquisition of Hotel Centraza Hakata (including expenses for acquisition)that it acquired on April 1, 2016. JHR also uses the subject proceeds to partly fund the acquisition of HOTEL VISTAGRANDE OSAKA, Hilton Nagoya and HOTEL ASCENT FUKUOKA as described above in “1. Acquisition of assets”
and “2. Contract conclusion on acquisition of asset.” In addition, with regard to the remaining proceeds procured from thedomestic public offering and overseas offering together with the proceeds procured from the third-party allotment in theamount of ¥926,943,440 will be cash on hand and will be used to partly fund the future acquisition of specified assets,
partly repay the loan amount or appropriate to repairs and capital expenditures to maintain and improve competitiveness ofthe existing properties.

－

44 －

(8) Changes in total number of investment units issued and outstanding
The following is the status of increase (decrease) in the total number of investment units issued and outstanding and unitholders’capital through to the end of the midterm period under review.

Date

November 10, 2005
June 13, 2006
April 6, 2011
April 1, 2012
April 1, 2012
September 12, 2012
October 11, 2012
April 17, 2013
September 9, 2014
January 27, 2015
February 18, 2015
June 22, 2015
July 23, 2015
January 20, 2016
February 17, 2016
(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)(Note 8)(Note 9)(Note 10)(Note 11)

(Note 12)(Note 13)

(Note 14)
(Note 15)

Capital transaction

Incorporation through private placement
Capital increase throughpublic offering of investment units
Capital increase throughthird-party allotment of investment units
Investment unit split
MergerCapital increase throughpublic offering of investment units
Capital increase throughthird-party allotment of investment units
Capital increase throughpublic offering of investment units
Capital increase throughpublic offering of investment units
Capital increase throughpublic offering of investment units
Capital increase throughthird-party allotment of investment units
Capital increase throughpublic offering of investment units
Capital increase throughthird-party allotment of investment units
Capital increase throughpublic offering of investment units
Capital increase throughthird-party allotment of investment units

Total number ofinvestment units
issued and outstanding(Units)Increase
Balance(Decrease)
400
400Unitholders’ capital(JPY1M)
Increase(Decrease)
200

Note

Balance
200(Note 1)41,80042,20019,361

19,561(Note 2)

15,831

58,031

3,599

23,161(Note 3)

638,341
1,162,909

696,372
1,859,281-

23,161
23,161(Note 4)(Note 5)240,000

2,099,281

4,855

28,017(Note 6)

12,0002,111,281

242

28,260(Note 7)510,000

2,621,281

20,585

48,845(Note 8)170,000

2,791,281

10,17959,024(Note 9)200,000

2,991,281

14,97473,999(Note 10)9,041

3,000,322

676

74,676(Note 11)140,000

3,140,322

10,50085,177(Note 12)

3,905

3,144,227

292

85,470(Note 13)

170,000

3,314,227

13,98699,456(Note 14)7,680

3,321,907

631

100,088(Note 15)

At the time of incorporation, investment units were issued with an issue price per unit of ¥500,000.
New investment units were issued through public offering with an issue price per unit of ¥480,000 (issue value of ¥463,200) in order to procure funds
for the acquisition of new properties, etc.
New investment units were issued through third-party allotment with an issue value per unit of ¥227,400 in order to procure funds for the acquisitionof new properties.
Conducted a 12-for-1 split of investment units.
JHR (the former NHF) merged with Japan Hotel & Resort, Inc. (the former JHR). The merger was an absorption-type merger pursuant to Article 147of the Investment Trusts Act where JHR is the surviving corporation and the former JHR is the absorbed corporation. Following this merger, 11
investment units of JHR after the split of investment units were delivered by allotment for each investment unit of the former JHR.
New investment units were issued through public offering with an issue price per unit of ¥20,990 (issue value of ¥20,232) in order to procure funds
for the acquisition of new properties, etc.
New investment units were issued through third-party allotment with an issue valuee per unit of ¥20,232 in order to repay loans payable, etc.
New investment units were issued through public offering with an issue price per unit of ¥41,778 (issue value of ¥40,363) in order to procure funds
for the acquisition of new properties, etc.
New investment units were issued through public offering with an issue price per unit of ¥61,912 (issue value of ¥59,880) in order to procure funds
for the acquisition of new properties, etc.
New investment units were issued through public offering with an issue price per unit of ¥77,415 (issue value of ¥74,874) in order to procure funds
for the acquisition of new properties, etc.
New investment units were issued through third-party allotment with an issue value per unit of ¥74,874 in order to procure funds for allocation to partof future acquisitions of specified assets, part of other repayment of loans, or capital expenditures to maintain or improve competitiveness of existing
properties.
New investment units were issued through public offering with an issue price per unit of ¥77,512 (issue value of ¥75,007) in order to procure funds
for the acquisition of new properties, etc.
New investment units were issued through third-party allotment with an issue value per unit of ¥75,007 in order to procure funds for allocation to partof future acquisitions of specified assets, part of other repayment of loans, or capital expenditures to maintain or improve competitiveness of existing
properties.
New investment units were issued through public offering with an issue price per unit of ¥85,020 (issue value of ¥82,273) in order to procure funds
for the allocation of new properties, etc.
New investment units were issued through third-party allotment with an issue value per unit of ¥82,273 in order to procure funds for allocation of
new properties, etc.

45

4. Changes in directors(1) Directors of JHR
The following are the directors of JHR as of the date of this report.
Title

Name

Executive

KanameDirector

MasudaMajor career
Apr. 1990

Registered as a lawyer (Daiichi Tokyo Bar Association)

Oct. 1998

Joined Nishimura & Partners (Present Nishimura & Asahi)
Joined Merrill Lynch Japan Securities Co., Ltd.

Nov. 2000
Mar. 2001

General Counsel
Executive Director (Concurrent position)

Aug. 2002
May 2003

Enrolled in Columbia Law School, Columbia University, U.S.
Graduated from Columbia Law School, Columbia University, U.S.

Sep. 2006(LL.M.)
Registered as a lawyer, State of New YorkFeb. 2008

Established Masuda & Partners Law Office asManaging Partner (current)

Jun. 2008

Joined Jibun Bank Corporation as Outside Corporate Auditor(current)

Sep. 2010
Feb. 2012

Joined Japan Hotel and Resort, Inc. as Executive Director
Joined Commons Asset Management, Inc. as Outside Corporate

Jun. 2014

Auditor (current)
Joined Kando Co., Ltd. as Outside Director (current)

Oct. 2014
Nov. 2015

Joined CROSSWARP Inc. as Outside Corporate Auditor (current)
Joined Japan Hotel REIT Investment Corporation as Executive

Mar. 2016

Director (current)
Joined GMO Internet, Inc. as Director (Independent Director) /Number ofinvestment
units held

0

Audit and Supervisory Committee Member (current)
Apr. 1966

Joined Sumitomo Mitsui Trust Bank, Limited (formerly, The Mitsui

May 1988

Trust and Banking Co., Ltd.)
Branch Manager, Yokosuka Branch

Dec. 1989
May 1991

Branch Manager, Umeda Branch
General Manager, Investment Advisory Department
General Manager, Pension Fund Management Department
Joined JDC Corporation and served as Managing Director
Joined Sumitomo Mitsui Trust Asset Management Co., Ltd.
(formerly, Chuo Mitsui Asset Management Co., Ltd.) as Managing

Supervisory

HiroshiJan. 1993
Jun. 1995

Director

Matsuzawa

Jul. 1999

Sep. 2001

Director
Representative Director and President

May 2004
Apr. 2012

Joined Premier Investment Corporation as Executive Officer
Joined Japan Hotel REIT Investment Corporation as Supervisory
Director (current)

－

46 －

0

TitleName

Supervisory
Director

TetsuyaMishiku

Major career
Apr. 1993

Registered as a lawyer (Daiichi Tokyo Bar Association)

Dec. 2000

Joined Iinuma Law OfficePartner

Sep. 2002
Nov. 2003

Part-time lecturer at Chuo University
Changed registration to Shizuoka Bar Association

Nov. 2005

Joined Aoba Law Office as Partner
Joined Japan Hotel REIT Investment Corporation (formerly, Nippon
Hotel Fund Investment Corporation) as Supervisory Director(current)

Dec. 2005
Mar. 2007

Joined A-too Co., Ltd. as Part-time Corporate Auditor
Joined Healing Entertainment Co., Ltd. as Part-time Corporate

Aug. 2010

Auditor (current)
Joined Mishiku & Nagamachi Law Office (formerly, Aoi Tower Law

Sep. 2010

Office) as Representative (current)
Joined Koike Roof and Siding KK as Outside Corporate Auditor

Aug. 2011(current)
Outside Director of A-too Co., Ltd. (current)

Apr. 1971

Joined Development Bank of Japan, Inc. (formerly, Japan
Development Bank) responsible for lending and investment

Apr. 1997
Apr. 1998

General Manager, Retail Department at Head Office
Joined K.K. Hotel Odakyu as Managing Director and General

Apr. 2002

Manager of Accounting Department
Joined K.K. Hotel Odakyu (formerly, K.K. Odakyu Hotels andNumber ofinvestment
units held

0

Resorts which merged with K.K. Hotel Odakyu later) as Managing
Director responsible for marketing
Supervisory
Director

HirotoKashiiJun. 2003

Joined New Kansai International Airport Co., Ltd. (formerly, KansaiInternational Airport Co., Ltd.) as Executive Officer responsible for0

terminal sales promotion, subsidiaries management and hotelbusinesses(Note 1)

(Note 2)

Jun. 2009
Jun. 2012

Joined Kyowa Co., Ltd. as Representative Director
Joined Japan Carbon Finance, Ltd. as Managing Director

Mar. 2013
Jun. 2013

Representative Director
Joined DBJ Asset Management Co., Ltd. as Corporate Auditor

Nov. 2015

Joined Japan Hotel REIT Investment Corporation as Supervisory
Director (current)

Based on the resolutions made at the 7th General Meeting of Unitholders held on November 26, 2015, Yukio Isa resigned from office of Executive
Director as of the date, and Kaname Masuda newly took office of Executive Director of JHR. In addition, Hiroto Kashii newly took office as
Supervisory Director of JHR.
In case the number of Executive Director does not meet the requirement stipulated by laws and regulations, Hisashi Furukawa, Representative
Director of the Asset Management Company, was elected as Substitute Executive Director, based on the resolution made by the 7th General Meetingof Unitholders of JHR held on November 26, 2015.

47

(2) Directors of the Asset Management Company
The following are the directors of the Asset Management Company as of the date of this report.
Title

Name

Major career
Apr. 1982
Jan. 1984
Jul. 1990

Representative
Director andPresident

Hisashi
Furukawa

Apr. 2000

May 2004
Aug. 2013
Jun. 2014
Apr. 1986
Dec. 1998
Mar. 2001

Director

Shuya
MatsubaraJun. 2009
Apr. 2012
May 2013
Apr. 2014
Mar. 2015
Apr. 1999
Jul. 2002
Aug. 2003

Director

ToshitakaIshidoSep. 2006
Apr. 2007
Apr. 2012

Mar. 2013

Joined Sumitomo Realty & Development Co., Ltd.
Building Business Department
Seconded to its subsidiary in the U.S.
Joined Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
(formerly, Morgan Stanley Japan Limited) and served as Executive
Director of the Real Estate Group in the Investment Banking
Division
Joined UBS Securities Co., Ltd. (formerly, Warburg Dillon Read
(Japan) Limited) and served as Co-head and Executive Director of
the Real Estate Sector Team in the Corporate Finance Division
Joined Rockpoint Group, L.L.C. as Representative of Japan Officeand Principal
Established River Flows, Inc. as Representative Director
Joined Japan Hotel REIT Advisors Co., Ltd. as Representative
Director and President (current)
Joined The Hyakujushi Bank, Ltd. and served as Deputy Manager of
the International Affairs Department
Joined Deloitte Tohmatsu Consulting LLC as Manager of the
Financial Division
Joined Goldman Sachs Realty Japan, Ltd. and served as Director andJoint Group Leader of the Strategic Management Group in the
Acquisition Division
Joined Japan Hotel & Resort K.K. as Director
Joined Japan Hotel REIT Advisors Co., Ltd. as Director (current)
and Senior General Manager of the Finance & Planning Department
Senior General Manager of the Finance & Accounting Division
Senior General Manager of the Finance & Accounting Division andGeneral Manager of the Finance Department
Senior General Manager of the Finance & Planning Division andGeneral Manager of the Finance & Planning Department (current)
Joined Value Management Institute, Inc.
Joined Hospitality Advisory Group of KPMG Business Advisory
LLC (Tokyo Branch)
Manager of the Hospitality Group of KPMG FAS Co., Ltd. (Tokyo
Branch of KPMG Business Advisory LLC was merged with KPMGFAS Co., Ltd.)
Joined Japan Hotel & Resort K.K. and served as Senior Manager
Director and Senior General Manager of Asset Management
Department
Joined Japan Hotel REIT Advisors Co., Ltd. as Senior General
Manager of Investment Division (current) and General Manager ofAcquisitions Department
Director (current)

－

48 －

Number ofshares held

0

0

0

TitleDirector

Director

Name

NoboruItabashi

Hiroyuki
Aoki

Director

Suchad(Chairman)

Chiaranussati

Major career
Apr. 1995

Joined Asahi Sangyo Kaisha, Ltd., Fabricated Metals Department

Jan. 1998

Joined British American Tobacco Japan, Ltd. (formerly, Rothmans
Japan), Finance Department

Aug. 1999
Sep. 2006

Joined Sun Microsystems K.K., Field Finance Division
Joined Japan Hotel & Resort K.K. and served as Senior Manager ofApr. 2007

the Finance and Accounting Division
Senior General Manager of Operations Division

Apr. 2012

Joined Japan Hotel REIT Advisors Co., Ltd. as General Manager ofthe Accounting Department

Mar. 2015

Director, Senior General Manager of Operations Division & General
Manager of Accounting and Reporting Department (current)

Sep. 1994

Joined Deloitte & Touche LLP, New York Office, Accounting &Jun. 1997

Audit Department
Joined Ingersoll-Rand Headquarters, Internal Audit Department

Nov. 2001
Jul. 2002

Joined KPMG Tax Corporation (formerly, Arthur Andersen LLP)
Joined Ripplewood Holdings LLC, Hotel Investment Group as Vice

Aug. 2005

President
Joined Creative Renovation Group Japan, Inc. as Vice President ofJan. 2008

Finance
Joined Tokyo Venture Gear Co. Ltd. as Director

Nov. 2011

Appointed Representative Director of SC Capital Partners Japan Co.
Ltd. (formerly, RE Capital Services Japan Co., Ltd.) (current)

Dec. 2011

Appointed Statutory Auditor (part-time) of Japan Hotel & Resort
K.K.

Apr. 2012

Appointed Director (part-time) of Japan Hotel REIT Advisors Co.,
Ltd. (current)

Oct. 1987

Joined the Central Bank of Thailand, Foreign Exchange Reserve
Management Division

Oct. 1991

Joined Temasek Holdings (in Singapore) and served as Manager of
Direct Investment

Nov. 1992

Joined JP Morgan (in Singapore) and served as Vice President in theReal Estate Investment and Investment Banking DivisionNov. 1998
Apr. 1999

Appointed Advisor at the Central Bank of Thailand
Joined Westbrook in Singapore as Principal and Managing Director

Nov. 2004

responsible for Asian investment activities
Established Real Estate Capital Asia Partners, L.P.

Oct. 2007
May 2010

Appointed Director of SC Management Limited (current)
Appointed Director of Rockrise Sdn Bhd as Director (current)

Aug. 2010

Appointed Director (part-time) of Japan Hotel REIT Advisors Co.,
Ltd. (current)

Mar. 2011

Appointed Director of SCCP Asset Management Pte. Ltd. (formerly,
SC Capital Partners Pte. Ltd.) (current)

Aug. 2015
Oct. 2015

Appointed Director of SC J-Holdings Pte. Ltd. (current)
Appointed Chairman (part-time) of Japan Hotel REIT Advisors Co.,
Ltd. (current)49

Number ofshares held

0

0

0

TitleName

Major career
May 1989

Joined Starwood Hotels & Resort Worldwide, Inc. (formerly, Westin
Hotel Company)

Jan. 2003

Participated in the establishment of Octagon Capital Partners Pte
Ltd. (Co-founder)Oct. 2007
Aug. 2010

Joined SC Management Ltd. as Managing Director
Appointed Director (part-time) of Japan Hotel REIT Advisors Co.,

Mar. 2011

Ltd. (current)
Joined SCCP Asset Management Pte. Ltd. (formerly, SC Capital

Ian George
Director

WinstonLien

Number ofshares held

0

Partners Pte. Ltd.) as Managing Director (current)

Director

Mar. 1988

Joined Government of Singapore Investment Corporation (GIC)

Apr. 1995

Joined Rodamco PACIFIC B.V. / Rodamco Asia N.V. as Managing
Director and Head of Investment Management

Jun. 2007

Appointed independent Non-Executive Director and member of the
Audit Committee of Travelsky Technology Ltd

Nov. 2007

Participated in the establishment of Stonegate China Properties
Limited (Founder and CEO)

Sep. 2008
Aug. 2010

Joined SC Management Ltd. as Managing Director
Appointed Director (part-time) of Japan Hotel REIT Advisors Co.,

Aug. 2013

Ltd. (current)
Appointed Director of SC J-Holdings Pte. Ltd. (formerly, SC Core

Dec. 2015

Manager Pte. Ltd.) (current)
Appointed Director of SCCP Asset Management Pte. Ltd. (formerly,

Chua Keng
Kim

0

SC Capital Partners Pte. Ltd.) (current)
Apr. 1974
Oct. 1979

Joined Daiwa Securities Co. Ltd.
Joined Mizuho Securities Co., Ltd. (formerly, Wako Securities Co.,

Mar. 1998

Ltd.)
Seconded to Wako International (Europe) Ltd. as President

Apr. 2000

Corporate

ShigeoAuditorSekitaManager of the IPO Department at Mizuho Securities Co., Ltd.
(formerly, Shinko Securities Co., Ltd. The corporation’s name

Jan. 2002changed due to merger)
Joined WestLB Securities Inc. as Director of the Investment

Aug. 2005

Banking Group
Joined Credit Suisse Securities (Japan) Ltd. as Director of theSep. 2010

Structured Investment Department
Joined Japan Hotel REIT Advisors Co., Ltd. as Advisor

Dec. 2010
Apr. 2012

Representative Director
Corporate Auditor (part-time) (current)

Oct. 2013

Joined Alpha Japan Asset Advisors Ltd. as Compliance Manager(current)

－

50 －

0

5. Reference information(1) Investment status
The following outlines the investment status of JHR as of the end of the midterm period under review.
Assetcategory

Hotel type
(Note 1)

Prefectural
location

Tokyo

Limited-service
hotel
Osaka
Hokkaido
Kyoto
FukuokaRealestateintrust

Okinawa
KumamotoNaraibis Tokyo Shinjuku
CANDEO HOTELS UENO-KOEN
the b ikebukuro
the b akasaka-mitsuke
Hotel Sunroute Shinbashi
Comfort Hotel Tokyo Higashi Nihombashi
the b hachioji
the b ochanomizu
Smile Hotel Nihombashi Mitsukoshimae
R&B Hotel Ueno Hirokoji
R&B Hotel Higashi Nihonbashi
Hotel Vista Kamata Tokyo
the b suidobashi
Dormy Inn EXPRESS Asakusa
Chisun Inn Kamata
Namba Oriental Hotelibis Styles Sapporo
Mercure Sapporo
ibis Styles Kyoto Station
the b hakata
Hakata Nakasu Washington Hotel Plaza
Toyoko Inn Hakata-guchi Ekimae
Mercure Okinawa Naha
Dormy Inn Kumamoto

1,910

0.8

1,891

0.7

Subtotal
Oriental Hotel tokyo bay
Hotel Francs
ACTIVE-INTER CITY HIROSHIMA(Sheraton Grand Hiroshima Hotel) (Note 4)
Oriental Hotel Hiroshima
Kobe Meriken Park Oriental Hotel
Hotel Centraza Hakata
Mercure Yokosuka
Subtotal

90,924
18,512
3,165

37.8
7.7
1.3

97,48018,363
3,147

37.7
7.1
1.2

17,934

7.5

17,845

6.9

4,043
9,963
－
1,659
55,277

1.7
4.1
－
0.7
23.0

4,059
9,933
7,548
1,650
62,548

1.6
3.8
2.9
0.6
24.2

Hotel Nikko Alivila

18,325

7.6

18,332

7.1

Okinawa Marriott Resort & Spa
The Beach Tower Okinawa
Hilton Tokyo Bay
Hotel Keihan Universal City
Hakone Setsugetsuka
Subtotal

15,025
6,882
26,1096,019
3,788
76,150

6.3
2.9
10.9
2.5
1.6
31.7

14,934
6,869
26,115
5,984
3,762
75,998

5.8
2.7
10.1
2.3
1.5
29.4

Real estate in trust – Total

222,352

92.5

236,027

91.3

Deposits and other assets (Note 5)

18,003

7.5

22,488

8.7

Total assets

240,356

100.0

258,515

100.0

Hiroshima
Hyogo
Fukuoka
Kanagawa

Okinawa
Resort hotel
Chiba
Osaka
Kanagawa

Amount(JPY1M)
Total liabilities
Total net assets(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)As ofJune 30, 2016
Total amount
Ratio toheld
total assets(JPY1M)(%)(Note 2)
(Note 3)
7,472
2.9
6,759
2.6
6,583
2.5
6,291
2.4
4,863
1.9
3,643
1.4
2,665
1.0
2,347
0.9
2,051
0.8
1,754
0.7
1,521
0.6
1,479
0.6
1,206
0.5
957
0.4
800
0.3
14,702
5.7
6,754
2.6
5,979
2.3
6,714
2.6
2,332
0.9
2,063
0.8
1,488
0.6
2,936
1.1
2,218
0.9

Nara Washington Hotel Plaza

Chiba
Full-service
hotel

Name

As of
December 31, 2015
Total amount
Ratio toheld
total assets(JPY1M)(%)(Note 2)
(Note 3)
7,487
3.1
－
－
6,591
2.7
6,295
2.6
4,873
2.0
3,655
1.5
2,670
1.1
2,350
1.0
2,056
0.9
1,761
0.7
1,528
0.6
1,473
0.6
1,204
0.5
963
0.4
802
0.3
14,689
6.1
6,788
2.8
6,010
2.5
6,725
2.8
2,323
1.0
2,075
0.9
1,498
0.6
2,953
1.2
2,232
0.9

110,442
129,914

Ratio tototal assets
(%)
45.9
54.1

Amount(JPY1M)
119,284
139,230

Ratio tototal assets
(%)
46.1
53.9

Hotels are categorized as limited-service hotels, full-service hotels or resort hotels according to the manner of operation.
For real estate in trust, “Total amount held” shows the amount calculated by deducting accumulated depreciation from acquisition price (including
expenses incidental to acquisition).
“Ratio to total assets” shows the ratio of total amount of each asset held to total assets, rounded off to one decimal place.
ACTIVE-INTER CITY HIROSHIMA is classified in accordance with the business category of Sheraton Grand Hiroshima Hotel, its main facility.
Includes machinery and equipment, tools, furniture and fixtures, construction in progress, construction in progress in trust, and intangible assets(excluding leasehold rights in trust and fixed-term leasehold of land in trust).

51

(2) Assets under management(A) Major issues of investment securities
Not applicable.
(B) Real estate properties under management
Not applicable.
(C) Other major assets under management
A. Summary of real estate properties under management
The following summarizes the real estate properties under management by JHR as of the end of the midterm period underreview.
Details of assets under management 1 (location, form of ownership, area, structural size, etc.)
Form of ownership(Note 1)
Property
No.

Name

1

Kobe Meriken Park
Oriental Hotel

2

Oriental Hoteltokyo bay3

Namba
Oriental Hotel

4

Hotel Nikko Alivila

5

Oriental Hotel
Hiroshima

6

ibis Tokyo Shinjuku

8

The Beach Tower
Okinawa

9

HakoneSetsugetsuka

10

Dormy Inn
Kumamoto

12

the b suidobashi

13

Dormy Inn
EXPRESS Asakusa

14

15

Hakata Nakasu
Washington Hotel
Plaza
Nara
Washington Hotel
Plaza

16

R&B Hotel
Ueno Hirokoji

17

R&B Hotel
Higashi Nihonbashi

18

Comfort HotelTokyo Higashi
Nihombashi

LocationLand

Building

Building
completion(Note 5)

Total
numberof guest
rooms(rooms)(Note 6)

Area
Acreage(m2)(Note 2)

Structures andstories
Total floor area
(Note 4)(m2)
(Note 3)Chuo-ku,
Kobe-shi,
Hyogo
Urayasu-shi,
Chiba
Chuo-ku,
Osaka-shi,
Osaka

Leaseholdright(Note 7)Compartmentalized
ownership

22,660.09(Note 7)

48,701.82(Note 7)S
14F

July 1995

319(Note 7)

Ownership

Ownership

9,914.00

44,833.11

SRC/S/RC
B2/12FMay 1995

503

Ownership

Ownership

4,505.23

19,364.33

S/SRC
B1/9F

March 1996

258

Yomitan-son,
Nakagami-gun,
Okinawa

Ownership/
Leaseholdright(Note 8)

Ownership

65,850.05(Note 8)38,024.98(Note 8)SRC
B1/10F

April 1994

396

Ownership

Ownership

1,792.84

13,752.22

SRC
B2/23F

September 1993
Extended in
September 2006

227

Ownership

Ownership

937.67

7,398.19

SRC/RC/S
B1/11F

September 1980

206

March 2004
Extended inJune 2005
Extended in
May 2006

280

Naka-ku,
Hiroshima-shi,
Hiroshima
Nishi-Shinjuku,
Shinjuku-ku,
Tokyo
Chatan-cho,
Nakagami-gun,
Okinawa
Hakone-machi,
Ashigarashimogun, Kanagawa
Kumamoto-shi,
Kumamoto
Hongo,
Bunkyo-ku,
Tokyo
Hanakawado,
Taito-ku,Tokyo
Hakata-ku,
Fukuoka-shi,
FukuokaNara-shi,
Nara
Ueno,
Taito-ku,Tokyo
HigashiNihonbashi,
Chuo-ku,Tokyo
Nihonbashibakurocho,
Chuo-ku,Tokyo

Ownership

Ownership

10,242.00

20,140.01

SRC
24F

Ownership

Ownership

10,478.89

10,655.03

RC
B1/5F

October 2006

158

Ownership

Ownership

1,295.85

7,701.19

SRC
13F

January 2008291
99

Ownership

Ownership

723.86

3,097.25

SRC/RC
B1/8F

August 1986
Extended in
September 1989

Ownership

Ownership

287.66

2,006.51

SRC/RC
10F

March 199777

Ownership

Ownership

1,128.46

5,692.24

S
12F

March 1995

247

Ownership

Ownership

2,322.28

5,385.82

S
7F

March 2000

204

Ownership

Ownership

446.293,060.21

S
13F

April 2002

187

Ownership/
Leaseholdright

Ownership

507.83(Note 9)3,715.26

S
10F

March 1998

202

Ownership

Ownership

823.67

5,765.26

S
11F

January 2008

259

－

52 －

Form of ownership(Note 1)
PropertyNo.

Name

LocationLand

Building

Building
completion(Note 5)

Total
numberof guest
rooms(rooms)(Note 6)

March 1997

164

Area
Acreage(m2)(Note 2)

Structures andstories
Total floor area
(Note 4)(m2)
(Note 3)22

Smile Hotel
Nihombashi
Mitsukoshimae

NihonbashiHoncho,
Chuo-ku,Tokyo

Ownership

Ownership24

Toyoko Inn
Hakata-guchi
EkimaeHakata-ku,
Fukuoka-shi,
Fukuoka

Ownership

Ownership

25

Hotel Vista
Kamata Tokyo

Ownership

Ownership

743.46

3,831.80

SRC/S
B1/9F

January 1992

106

26

Chisun Inn Kamata

Ownership

Ownership

240.35

1,499.87

SRC
12F

April 2003

70

29

Hotel Keihan
Universal City

3,350.14(Note 10)

17,252.71(Note 10)

S/SRC
21F

June 2001

330

30

Hotel Sunroute
Shinbashi

31

Hilton Tokyo Bay

32

ibis Styles
Kyoto Station

33

ibis Styles Sapporo

34

Mercure Sapporo

35

MercureOkinawa Naha

36

the b
akasaka-mitsuke

37

the b ikebukuro38

the b ochanomizu

39

the b hachioji

40

the b hakata

41

Hotel Francs

42

Mercure Yokosuka

Yokosuka-shi,
Kanagawa

43

Okinawa Marriott
Resort & Spa

Nago-shi,
Okinawa44

45
46(Note 1)
(Note 2)

Nishikamata,Ota-ku,Tokyo
Kamata,Ota-ku,Tokyo
Konohana-ku,
Osaka-shi,
Osaka
Shinbashi,
Minato-ku,
Tokyo
Urayasu-shi,
Chiba
Minami-ku,
Kyoto-shi,
Kyoto
Chuo-ku,
Sapporo-shi,
Hokkaido
Chuo-ku,
Sapporo-shi,
Hokkaido
Naha-shi,
Okinawa
Akasaka,Minato-ku,
Tokyo
Higashiikebukuro,
Toshima-ku,
Tokyo
Kandaawajicho,
Chiyoda-ku,
TokyoHachioji-shi,Tokyo
Hakata-ku,
Fukuoka-shi,
FukuokaMihama-ku,
Chiba-shi,
Chiba

Ownership/Compartmentalized
Leaseholdownershipright(Note 10)(Note 10)512.583,097.85

SRC/RC
B1/10F

Main building: Main building: Main building:Main building
565.983,566.46
SRC 14F
and annex bothAnnex:
Annex:
Annex:
September 2001
152.37856.68
SRC 9F

257

Ownership

Ownership

761.01

5,476.39

S/SRC
16F

March 2008

220

Ownership(Note 11)

Ownership(Note 11)

36,121.00(Note 11)

72,146.60(Note 11)

SRC
B1/11F

June 1988

823

Ownership

Ownership

1,107.77

5,003.99

RC
10F

March 2009215

Ownership

Ownership

2,515.22

14,992.49

RC
B1/16F

July 2010278

Ownership

Ownership

2,016.27

16,145.79

S
B1/15F

April 2009285

Ownership/
Leaseholdright

Ownership

2,860.69(Note 12)

10,884.25

RC
14F

August 2009260

Ownership

Ownership

625.46

2,867.04

S
8F

November 2002

122

Ownership

Ownership

718.715,650.01

SRC/S
B2/10F

June 1982

175

Ownership

Ownership

357.47

1,742.23

SRC
9F

August 199972

Ownership

Ownership

1,227.29

7,847.65

SRC
B2/12F

August 1986196

Ownership

Ownership

719.46

3,986.09

SRC
8F

September 1997

175

Ownership

Ownership

4,828.00

19,213.39

SRC
B1/13F

August 1991

222

Right of site
Compartmentalized(coownershipownership)(Note 13)
(Note 13)

1,887.86(Note 13)

16,881.82(Note 13)

SRC/S
B3/21F

November 1993160

Ownership

52,988.00

36,430.15

SRC
14F

February 2005
Extended in
December 2006

361

6,379.02(Note 14)39,540.75(Note 14)

S/RC/SRC
B1/21F

August 2010

1,559.03

7,030.10

S
12F

December 2009268

2,163.42

18,105.42

SRC
B3/12F

July 1985

194

Ownership

ACTIVE-INTER
Right of site
Higashi-ku,
Compartmentalized
CITY HIROSHIMA(coownership
Hiroshima-shi,(Sheraton Grandownership)(Note 14)
Hiroshima
Hiroshima Hotel)(Note 14)CANDEO HOTELS Negishi, Taito-ku,
Ownership
Ownership
UENO-KOEN
Tokyo
Hakata-ku,
Fixed-term
Hotel Centraza
Fukuoka-shi, leasehold right Ownership
HakataFukuoka(Note 16)

238
(Note 15)

“Form of ownership” is the type of right held by the owner of the real estate that is the asset held (the trustee in the case of a real estate in trust).
“Acreage” is the area of the entire site based on the registration or registration record. The registration or registration record entry may not coincidewith the present state of the land.

53

(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)(Note 8)(Note 9)(Note 10)(Note 11)

(Note 12)(Note 13)

(Note 14)

(Note 15)
(Note 16)
(Note 17)

“Total floor area” is the area of the building based on the registration or registration record. The area of the accessory building, if any, is included
unless otherwise stated. The registration or registration record entry may not coincide with the present state of the building.
Under “Structures and stories,” “S” means steel-framed building, “RC” means reinforced concrete building and “SRC” means steel reinforced
concrete building. The structure of the main building is shown, but there may be cases where there is a parking lot or storage space as an accessory to
the building in a separate building.
“Building completion” is based on the registration or registration record.
“Total number of guest rooms” is the respective number of guest rooms available for sale (excluding rooms occupied by the hotel for a long term) at
the end of the midterm period under review.
The land of Kobe Meriken Park Oriental Hotel is land leased by JHR from the City of Kobe and land with permission for use from the City of Kobe
under the City of Kobe’s ordinance for harbor facilities, etc. The acreage above is based on the number on the construction confirmation application
form. The acreage for which permission for use has been obtained is 2,804.18 square meters, of which 1,188.32 square meters is included in theacreage above. In addition, the building of Kobe Meriken Park Oriental Hotel is a building under compartmentalized ownership by twocompartmentalized owners (JHR and the City of Kobe). The figure above is the total floor area of the entire building under compartmentalized
ownership (including an accessory building of 764.83 square meters), where the portion owned exclusively by JHR (excluding an accessory buildingof 764.83 square meters) is 31,899.07 square meters, the portion owned exclusively by the City of Kobe is 13,960.11 square meters, and the portion
that is the common area of JHR and the City of Kobe is 2,077.81 square meters (JHR has 72.18% interest and the City of Kobe has 27.82% interest of
the common area). Furthermore, regarding the portion of the building owned exclusively by the City of Kobe, the building for which JHR has
obtained the permission for use is 694.00 square meters (part of the building for which the permission for use was obtained was returned on April 1,
2010, resulting in total floor area changing from 824.00 square meters to 694.00 square meters) and is included in the total floor area above of
48,701.82 square meters.
The land of Hotel Nikko Alivila is land owned by JHR or land leased or subleased by JHR from Kabushiki Kaisha Okinawa Umi No Sono
(hereinafter referred to as the “Umi No Sono”). The acreage above is the sum total of the area on the certified copy of the real estate registry of eachland. Furthermore, the land leased or land subleased includes those where only a portion of a parcel of land is leased or subleased and, thus, theacreage above includes some area that is not leased or subleased by JHR from Umi No Sono. In addition, subdivision of part of the subleased land
resulted in the acreage above changing from 67,038.05 square meters to 65,850.05 square meters on June 12, 2012. The sum total of the acreage ofthe land owned by JHR and the land leased or subleased calculated based on the certified copy of the real estate registry, lease contract with Umi No
Sono, etc. is 57,406.26 square meters. The total floor area above includes an accessory building of 120.10 square meters and excludes a building
leased from Umi No Sono of 493.50 square meters.
Of the acreage of R&B Hotel Higashi Nihonbashi, the area of the land leased is 77.38 square meters.
The land of Hotel Keihan Universal City comprises land under co-ownership with other right holders (8,785.43 square meters) and land leased underquasi-co-ownership with other right holders from the City of Osaka (8,788.67 square meters). The acreage above is the sum total of JHR’s coownership interest of the land under co-ownership of 1,674.76 square meters (approximately 19.06% of co-ownership interest) and JHR’s quasi-coownership interest in the land leasehold right of the land leased from the City of Osaka of 1,675.38 square meters (approximately 19.06% of quasico-ownership interest). In addition, the building of Hotel Keihan Universal City is a building under compartmentalized ownership for Universal
CityWalk Osaka, which comprises two hotel buildings, business facilities, commercial facilities and others, as a single building (86,888.64 square
meters). The portion owned exclusively by JHR (including the common area by bylaws) is 15,749.32 square meters, and JHR’s co-ownership interestof the common area (15,648.98 square meters) is 3,466.56 square meters (approximately 22.15% of co-ownership interest). “Total floor area” in thetable above is the total floor area based on the completion drawing of new construction of Hotel Keihan.
The land of Hilton Tokyo Bay is land under co-ownership with other right holders. The acreage is the total area of the land under co-ownership. Of
the acreage, JHR’s co-ownership interest is 32,508.90 square meters (9/10 of co-ownership interest). In addition, the building of Hilton Tokyo Bay is
a building under co-ownership with other right holders. The total floor area is the total area of the building under co-ownership (including anaccessory building of 37.38 square meters). Of the total floor area, JHR’s co-ownership interest is 64,931.94 square meters (9/10 of co-ownershipinterest).
The acreage of Mercure Okinawa Naha includes land leased of 125.67 square meters.
The land of Mercure Yokosuka comprises the entire joint ownership of right of site. The acreage is the area equivalent to JHR’s co-ownership interestof the right to use the site (181,372/1,000,000 or approximately 18.14%) of the entire area of the subject land (10,408.79 square meters), which is
1,887.86 square meters. In addition, the building is a building under compartmentalized ownership for Bay Square Yokosuka Ichibankan, which
comprises a hotel, a theater, stores, residential complex, office spaces and parking lots, as a single building (67,019.04 square meters). Total floor areais the area of the portion owned exclusively by the hotel on the certified copy of the real estate registry.
The land of ACTIVE-INTER CITY HIROSHIMA comprises the entire joint ownership of right of site. The acreage is the area equivalent to JHR’s
co-ownership interest of the right to use the site (9,862,454/10,000,000 or approximately 98.62%) of the entire area of the subject land (6,468.28
square meters), which is 6,379.02 square meters. In addition, the building is a building under compartmentalized ownership for ACTIVE-INTER
CITY HIROSHIMA, which comprises Sheraton Grand Hiroshima Hotel, office spaces, retail zone, parking lots and bicycle parking lots, etc., as asingle building (6,379.02 square meters). Total floor area is the area of the exclusive area for the hotel, office spaces, stores and parking lots on thecertified copy of the real estate registry.
The total number of guest rooms of ACTIVE-INTER CITY HIROSHIMA is the total number of guest rooms of the main facility Sheraton Grand
Hiroshima Hotel.
Remaining term of the fixed-term leasehold of land of Hotel Centraza Hakata is until March 30, 2057.
The omitted property numbers are the property numbers of assets that have been transferred before the end of the previous fiscal year.

－

54 －

Details of assets under management 2 (acquisition price, etc.)

PropertyNo.

Name

Acquisition
price(JPY1M)(Note 2)Carrying
amountat end ofperiod(JPY1M)(Note 3)

Appraisalvalue
at end ofperiod(JPY1M)(Note 4)Upper-middle

10,900

10,116

14,300N

4.5

Unsecured

Grade(Note 1)

Investment
ratio
Appraisal(Acquisition Collateralagencyprice)(Note 7)(Note 5)(%)(Note 6)

1

Kobe Meriken Park Oriental Hotel

2

Oriental Hotel tokyo bay

Mid-price

19,90018,57434,000N

8.3

Unsecured

3

Namba Oriental Hotel

Mid-price

15,00014,82431,700N

6.3

Unsecured

4

Hotel Nikko Alivila

Luxury18,90018,61627,300N

7.9

Unsecured

5

Oriental Hotel Hiroshima

Upper-middle

4,100

4,108

4,180

N

1.7

Unsecured6

ibis Tokyo Shinjuku

Mid-price

7,243

7,537

9,310

N

3.0

Unsecured

8

The Beach Tower Okinawa

Mid-price

7,610

6,874

9,450

N

3.2

Unsecured

9

Hakone Setsugetsuka

Mid-price

4,070

3,771

4,990

N

1.7

Unsecured

10

Dormy Inn Kumamoto

Mid-price

2,334

2,218

2,870

M

1.0

Unsecured

12

the b suidobashi

Mid-price

1,120

1,232

1,960

N

0.5

Unsecured

13

Dormy Inn EXPRESS Asakusa

Economy

999

957

1,310

M

0.4

Unsecured

14

Hakata Nakasu Washington Hotel Plaza

Mid-price

2,130

2,064

4,260

N

0.9

Unsecured

15

Nara Washington Hotel Plaza

Mid-price

2,050

1,896

2,460

N

0.9

Unsecured16

R&B Hotel Ueno Hirokoji

Economy

1,720

1,754

1,950

M

0.7

Unsecured17

R&B Hotel Higashi Nihonbashi

Economy

1,534

1,521

2,050

M

0.6

Unsecured

18

Comfort Hotel Tokyo Higashi Nihombashi

Economy

3,746

3,643

5,350

M

1.6

Unsecured

22

Smile Hotel Nihombashi Mitsukoshimae

Economy

2,108

2,051

3,070

M

0.9

Unsecured24

Toyoko Inn Hakata-guchi Ekimae

Economy

1,652

1,488

2,700

T

0.7

Unsecured

25

Hotel Vista Kamata Tokyo

Economy

1,512

1,479

1,990

T

0.6

Unsecured

26

Chisun Inn Kamata

Economy

823

804

1,410

T

0.3

Unsecured

29

Hotel Keihan Universal City

Mid-price

6,000

5,985

14,800R

2.5

Unsecured

30

Hotel Sunroute Shinbashi

Mid-price

4,800

4,863

8,510

D

2.0

Unsecured

31

Hilton Tokyo Bay

Luxury26,05026,11536,000D

10.9

Unsecured32

ibis Styles Kyoto Station

Mid-price

6,600

6,742

10,300D

2.8

Unsecured33

ibis Styles Sapporo

Mid-price

6,797

6,766

10,300N

2.8

Unsecured34

Mercure Sapporo

Mid-price

6,000

5,996

10,000N

2.5

Unsecured35

Mercure Okinawa Naha

Mid-price

3,000

2,954

6,880

N

1.3

Unsecured36

the b akasaka-mitsuke

Mid-price

6,250

6,307

6,900

N

2.6

Unsecured37

the b ikebukuro

Mid-price

6,520

6,590

7,600

N

2.7

Unsecured38

the b ochanomizu

Mid-price

2,320

2,353

2,650

N

1.0

Unsecured39

the b hachioji

Mid-price

2,610

2,681

3,090

N

1.1

Unsecured40

the b hakata

Mid-price

2,300

2,355

3,110

N

1.0

Unsecured

41

Hotel Francs

Mid-price

3,105

3,147

4,070

D

1.3

Unsecured42

Mercure Yokosuka

Mid-price

1,650

1,658

1,870

D

0.7

Unsecured

43

Okinawa Marriott Resort & Spa

Upper-middle

14,95015,044

17,200N

6.2

Unsecured

44

ACTIVE-INTER CITY HIROSHIMA(Sheraton Grand Hiroshima Hotel)

Luxury17,32017,86018,400D

7.2

Unsecured

45

CANDEO HOTELS UENO-KOEN

Mid-price

6,705

6,769

7,630

D

2.8

Unsecured

46

Hotel Centraza Hakata

Mid-price

7,197

7,561

7,390

D

3.0

Unsecured239,626

237,293343,310

Total(Note 1)
(Note 2)100.0

JHR categorizes hotels into the four grade classes “Luxury,” “Upper-middle,” “Mid-price” and “Economy” mainly from the perspective of average
daily rate, etc.
“Acquisition price” is the acquisition price stated on the purchase and sale agreement for beneficial interest in trust or real estate purchase and sale55

(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)(Note 8)agreement (consumption tax, local consumption tax and the acquisition expense such as broker’s fee are not included). The acceptance prices areindicated for the properties that have been accepted from the former JHR.
“Carrying amount at end of period” is the book value at the end of the midterm period under review, and includes not only the amounts for real estatein trust, but also machinery and equipment, tools, furniture and fixtures, construction in progress, construction in progress in trust, and intangible
assets.
“Appraisal value at end of period” is the appraisal value at the end of the midterm period under review as the date of appraisal, in accordance with theasset valuation methods and standards provided in JHR’s Articles of Incorporation and the regulations set forth by The Investment Trusts Association,
Japan.
Under “Appraisal agency,” the letters indicate the appraisers for the properties as follows:
M:
Morii Appraisal & Investment Consulting, Inc.
T:
The Tanizawa Sōgō Appraisal Co., Ltd.
J:Japan Real Estate Institute
R:
Rich Appraisal Institute Co., Ltd.
D:DAIWA REAL ESTATE APPRAISAL CO.,LTD.
“Investment ratio” is the ratio of acquisition price of the respective asset held at the end of the midterm period under review to the total amount ofacquisition price of all assets held at the end of the midterm period under review, rounded off to one decimal place.
“Collateral” is whether or not a pledge has been established for the beneficial interest in trust.
The omitted property numbers are the property numbers of assets that have been transferred.

Details of assets under management 3 (change in portfolio tenants)
The following is the change in total number of tenants, occupancy rate, etc. of real estate properties under management for the past
five years.

Number of tenants(Note 1)
Total leasable area
(Note 2)
Total leased area
(Note 3)
Occupancy rate
(Note 4)(Note 1)

(Note 2)

(Note 3)(Note 4)11th period
September 2011

12th period
March 2012

13th period
December 2012

14th period
December 2013

15th period
December 2014

16th period
December 2015

Midterm of
17th period
June 2016

21

24

37

38

57

113

117

101,028.49 m2

101,028.49 m2

288,875.32 m2

349,162.63 m2

386,826.71 m2

493,758.78 m2

519,798.46 m2

100,529.62 m2

101,028.49 m2

288,875.32 m2

349,162.63 m2

386,447.08 m2

493,138.06 m2

519,418.83 m2

99.5%

100.0%

100.0%

100.0%

99.9%

99.9%

99.9%

Number of tenants indicates the total number of tenants based on the lease contracts for respective real estate in trust (excluding tenants of parking
lots, etc.) as of the end of each fiscal period or midterm period. However, for properties for which master lease contracts under the pass-throughscheme are concluded in which trustee receives the same amount of rents, etc. from end tenants as is in principle, the total number of end tenants(excluding tenants of parking lots, etc.) is indicated.
In principle, leasable area represents leasable area of the building, which does not include leasable area of land (including parking lots on ground),based on a lease contract or plan for each real estate in trust. For properties in which the leased area is not described in the lease contract, leasablearea represents the area described in the registration of the building. Furthermore, when the leasable area in the lease contract is indicated in tsubo
units, the figure in the table has been converted to the area in metric units (3.30578 square meters per one tsubo). In this report, the same shall apply
hereinafter.
In principle, leased area represents the leased area described in the lease contract of the building. For properties in which the leased area is notdescribed in the lease contract, leased area shows the area described in the registration of the building. Furthermore, when the leased area in the lease
contract is indicated in tsubo units, the figure in the table has been converted to the area in metric units (3.30578 square meters per one tsubo).
However, for properties for which master lease contracts under the pass-through scheme are concluded in which trustee receives the same amount ofrents, etc. from rents, etc. from end tenants as is in principle, the total area for which lease contracts have been concluded with end tenants and which
are actually leased is indicated. In this report, the same shall apply hereinafter.
Occupancy rate indicates the percentage of leased area to leasable area of respective real estate properties in trust as of the end of each fiscal period or
midterm period. In this report, the same shall apply hereinafter.

Details of property assets 4 (information on major real estate)
Property name(Note 1)

Total number oftenants

Total annual rent

Total leased area

Total leasable area

Hilton Tokyo Bay

1

Fixed rent
¥1,872 million
Variable rent (Note 3)

64,931.94 m2(Note 4)64,931.94 m2(Note 4)(Note 1)
(Note 2)
(Note 3)

Change in occupancy rate
for the past five years(Note 2)14th period
100.0%
December 2013
15th period
100.0%
December 2014
16th period
100.0%
December 2015
Midterm of 17th
period100.0%
June 2016

The information on major real estate, which are those where the annual rent total accounts for at least 10% of total annual rent of the entire portfolio.
Total annual rent of the entire portfolio is the total annual rent calculated based on Note 2 of “C. Status of portfolio diversification” on page 65.
“Change in occupancy rate for the past five years” states only the occupancy rate subsequent to the commencement of asset management by JHR, andindicates the percentage of leased area to leasable area of respective real estate properties in trust as of the end of each fiscal period or midterm period.
The variable rent of Hilton Tokyo Bay is not disclosed as consent on disclosure has not been obtained from the tenant and thus considered to be acase where disclosure cannot be made due to unavoidable circumstances.

－

56 －

(Note 4)

The building of Hilton Tokyo Bay is a building under co-ownership with other right holders. JHR’s co-ownership interest is 64,931.94 square meters(9/10 of co-ownership interest).

57

Details of assets under management 5 (NOI, etc.)

1

Kobe Meriken Park Oriental Hotel

Variable/Fixed

Real estate
operating revenue(JPY1000)
401,804

2

Oriental Hotel tokyo bay

Variable/Fixed

798,421738,141

491,835

3

Namba Oriental Hotel

Variable/Fixed

744,653694,882

601,993

4

Hotel Nikko Alivila

Variable/Fixed

487,673412,549

255,318

5

Oriental Hotel Hiroshima

Variable/Fixed

206,441

183,225

145,365

6

ibis Tokyo Shinjuku

Management contract

410,069

316,455

282,588

8

The Beach Tower Okinawa

Fixed

255,515

234,115

172,228

9

Hakone Setsugetsuka

Fixed147,472

135,546

94,20910

Dormy Inn Kumamoto

Fixed

97,23086,271

66,36912

the b suidobashi

Variable/Fixed

62,43656,93945,175

13

Dormy Inn EXPRESS Asakusa

Fixed

31,997

27,61721,45314

Hakata Nakasu Washington Hotel Plaza (Note 4)

Fixed

120,000

112,000

98,00015

Nara Washington Hotel Plaza (Note 4)

Fixed

75,00067,00046,000

16

R&B Hotel Ueno Hirokoji

Fixed48,64741,42834,883

17

R&B Hotel Higashi Nihonbashi

Fixed61,10352,73143,30918

Comfort Hotel Tokyo Higashi Nihombashi

135,057

120,258

102,420

22

Smile Hotel Nihombashi Mitsukoshimae

85,751

77,85968,42424

Toyoko Inn Hakata-guchi Ekimae

70,51964,02453,32925

Hotel Vista Kamata Tokyo

46,802

39,522

28,07926

Chisun Inn Kamata

38,66534,82828,95229

Hotel Keihan Universal City

631,559

593,543551,552

30

Hotel Sunroute Shinbashi

245,243

216,845

206,273

31

Hilton Tokyo Bay

940,423

790,178

708,727

32

ibis Styles Kyoto Station

Fixed
Variable/Fixed(Note 5)
Fixed
Variable/Fixed(Note 5)
Variable
Variable/Fixed(Note 5)
Variable/Fixed(Note 5)
Variable/Fixed(Note 5)
Management contract

270,798

243,363

226,508

33

ibis Styles Sapporo

Management contract

269,696

210,204

174,105

34

Mercure Sapporo

Management contract

301,742

204,469

165,249

35

Mercure Okinawa NahaManagement contract

216,207173,164

148,12336

the b akasaka-mitsuke

Variable/Fixed

149,809

143,814

133,49237

the b ikebukuro

Variable/Fixed

188,222

181,456

166,88338

the b ochanomizu

Variable/Fixed

55,47752,49147,75239

the b hachioji

Variable/Fixed

112,230

104,218

92,19440

the b hakata

Variable/Fixed

108,235

103,627

94,06041

Hotel Francs

Fixed

150,000

133,307

109,473

42

Mercure Yokosuka

Variable

162,939

118,814103,971

43

Okinawa Marriott Resort & Spa

Variable/Fixed

274,999

245,153

136,88844

ACTIVE-INTER CITY HIROSHIMA

Variable/Fixed

656,203474,369

383,93445

CANDEO HOTELS UENO-KOEN (Note 6)

Fixed

134,736

133,146

116,828

46

Hotel Centraza Hakata (Note 7)

Variable/Fixed

196,364

136,016

78,0939,390,971

8,014,971

6,405,603

PropertyNo.

Name

Rent type(Note 1)

Total
(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)(Note 8)NOI
(Note 2)
(JPY1000)
260,942

NOI after depreciation(Note 3)
(JPY1000)
80,314

Under “Rent type,” “Fixed” is a property under a fixed rent structure, “Variable” is a property under a variable rent structure, “Management contract”
is a property under a management contract structure, and “Variable/Fixed” is a property under a combination of fixed and variable rent structures.
NOI = Real estate operating revenue − Real estate operating costs + Depreciation + Loss on retirement of noncurrent assets + Asset retirement
obligations expenses
NOI after depreciation (net real estate operating income) = Real estate operating revenue − Real estate operating costs
For Hakata Nakasu Washington Hotel Plaza and Nara Washington Hotel Plaza, consent on disclosure of rent in units of thousand yen has not beenobtained from the lessees and is thus rounded down to the nearest million yen.
For Smile Hotel Nihombashi Mitsukoshimae, Hotel Vista Kamata Tokyo, Hotel Keihan Universal City, Hotel Sunroute Shinbashi and Hilton Tokyo
Bay, the rent structure is one that has set not only fixed rent, but also partly rent based on revenue sharing.
CANDEO HOTELS UENO-KOEN was acquired as of February 1, 2016.
Hotel Centraza Hakata was acquired as of April 1, 2016.
The property numbers of assets that were transferred before the end of the previous fiscal year are intentionally omitted.

－

58 －

Details of assets under management 6 (status of rent settings of major tenants)

Tenant name(Note 1)

(Note 6)(Note 8)

Ratio tototal
(Note 2)

April 1, 2012
December 31, 2019
April 1, 2012
December 31, 2019
April 1, 2012
December 31, 2019
April 1, 2012
December 31, 2019
July 1, 2012
June 30, 2024
October 31, 2013
December 31, 2018
December 27, 2014
December 27, 2019
September 30, 2014
September 30, 2029
September 30, 2014
April 26, 2024
April 2, 2015
August 30, 201944,833.11 m2

8.6%

19,364.33 m2

3.7%

38,024.98 m2

7.3%

2

2.6%

5,789.26 m2

1.1%

2

4,628.32 m

0.9%

14,076.45 m2

2.7%

2

12,888.36 m

2.5%

10,884.25 m2

2.1%

2

16,881.82 m

3.3%

64,931.94 m2

12.5%

Total for major tenants

278,718.94 m2

Total for entire portfolio

519,418.83㎡ 100.0% 519,418.83 m2 100.0%

HiltonTokyo BayHotel

Ryokan/HotelReal estateleasing andmanagement

July 1, 2015
December 31, 201813,752.22 m

Annual rent
(By hotel)(Note 3)
(JPY1M)
Fixed rent
(Note 4)
Variable rent

Total annual rent
(By tenant)(Note 3)
(JPY1M)
Fixed rent
(Note 4)
Variable rent

645
(Note 7)

148,638.54 m2

28.6%

65,148.46 m2

12.5%

64,931.94 m2

12.5%

53.7% 278,718.94 m2

53.7%

631
(Note 7)797
(Note 7)804
(Note 7)341
(Note 7)(Note 8)(Note 8)(Note 8)(Note 8)(Note 8)(Note 8)3,221
(Note 7)(Note 8)1,872
(Note 9)1,872
(Note 9)5,093
11,532-

5,093
11,532-The information on major tenants, which are those accounting for at least 10% of total leased area of the entire portfolio.
Ratio to total is rounded off to one decimal place.
The ratio of annual rent by hotel or by tenant may vary depending on the amount of variable rent and income from management contracts and is thus
not shown.
Fixed rent is the amount arrived at when the monthly fixed rent income based on lease contracts valid as of June 30, 2016 between JHR and the major
tenant (rent of the building itself only, excluding common area maintenance charges and signage and parking usage fees; not factoring in any change
in rent during the fiscal period) is multiplied by 12, excluding variable rents and income from management contracts.
HMJ falls under the category of interested party, etc. under the Investment Trusts Act and sponsor-related party as stipulated in the Asset Management
Company’s company rule for transactions with sponsor-related persons.
HMJ has acquired all shares of Lagoon resort Nago Co., Ltd., which is the lessee and hotel operator of Okinawa Marriott Resort & Spa, K.K. A.I.C
Hiroshima Management, which is the lessee and hotel operator of Sheraton Grand Hiroshima Hotel (the main facility of ACTIVE-INTER CITYHIROSHIMA) and Hotel Centraza Co., Ltd., which is the lessee and hotel operator of Hotel Centraza Hakata. Accordingly, Lagoon resort Nago Co.,
Ltd., K.K. A.I.C Hiroshima Management and Hotel Centraza Co., Ltd. fall under the category of interested party, etc. under the Investment Trusts Act
and sponsor-related party as stipulated in the Asset Management Company’s company rule for transactions with sponsor-related persons.
The following are the leasing terms and conditions of Okinawa Marriott Resort & Spa, Sheraton Grand Hiroshima Hotel (the main facility of
ACTIVE-INTER CITY HIROSHIMA) and Hotel Centraza Hakata. The leased area, ratio of leased area and total annual fixed rent of HMJ and its
wholly-owned subsidiaries Lagoon resort Nago Co., Ltd., K.K. A.I.C Hiroshima Management and Hotel Centraza Co., Ltd. are 225,064.44 square
meters, 43.3% and ¥4,519 million, respectively.

Tenant name(Note 7)

Ratio tototal
(Note 2)
6.3%

THE DAIICHIBUILDING
CO., LTD.

(Note 5)Contract
commencement date
Contract
expiration date

32,663.90 m2

Accor(AAPC Japan
K.K.)(Note 4)

Kobe
Meriken Park
Oriental Hotel
Oriental Hoteltokyo bay
Namba
Oriental Hotel
Hotel Nikko
AlivilaOriental Hotel
Hiroshima
ibis
Tokyo Shinjuku
ibis Styles
Kyoto Station
ibis Styles
SapporoMercureSapporoMercureOkinawa Naha
MercureYokosukaBusiness
type

Total leased area
(By tenant)April 1, 2012
December 31, 2019

HMJ
(HotelManagement
Japan
Co., Ltd.)(Note 5)(Note 6)(Note 1)
(Note 2)
(Note 3)

Property name

Total leased area
(By hotel)

Property nameBusiness
type

Contract
commencement date
Contract
expiration dateJuly 10, 2015
December 31, 2020

Total leased area
Ratio of(m2)
total leased area

Annual rent
Fixed rent
Variable rent
(JPY1M)
550(*)

Lagoon resort Nago
Okinawa Marriott Resort & Spa
Hotel36,430.15
7.0%Co., Ltd.
K.K. A.I.C
ACTIVE-INTER CITY
December 18, 2015
348
Hiroshima
HIROSHIMA
Hotel
21,890.33
4.2%
December 31, 2026(*)
Management(Sheraton Grand Hiroshima Hotel)
Hotel Centraza
April 1, 2016, 2016
400
Hotel Centraza Hakata
Hotel18,105.42
3.5%Co., Ltd.
December 31, 2019(*)(*) For details of the variable rent arrangements for Okinawa Marriott Resort & Spa, ACTIVE-INTER CITY HIROSHIMA and Hotel Centraza
Hakata, please refer to “D. Overview of the hotel business; (1) Rent structures of hotels with variable rent, management contract or revenue
sharing” on page 68.
For details of the variable rent arrangements for HMJ, please refer to “D. Overview of the hotel business; (1) Rent structures of hotels with variable
rent, management contract or revenue sharing” on page 68.
Variable rent for Accor (AAPC Japan K.K.) means income from management contracts and variable rent. For details of the income from management59

(Note 9)contract arrangements, please refer to “D. Overview of the hotel business; (1) Rent structures of hotels with variable rent, management contract orrevenue sharing” on page 68.
The variable rent for THE DAI-ICHI BUILDING CO., LTD. is not disclosed as consent on disclosure has not been obtained from the tenant and thus
considered to be a case where disclosure cannot be made due to unavoidable circumstances. There is thus also no entry of the total for major tenants.

B. Income statements for individual real estate properties under management
The following are the individual income statements for real estate properties under management for the midterm period underreview (from January 1, 2016 to June 30, 2016). Figures are rounded down to the nearest thousand yen in principle, but areotherwise noted if circumstances do not allow for the figures to be stated in units of thousand yen. Income statement items thatare not directly attributable to the property are not included. In addition, the income statement amounts shown are on an
accrual basis in principle, but are otherwise noted if circumstances require the amounts to be shown on a cash basis.
Property No.

-

1

2

3

4

5

Portfolio total

Kobe
Meriken Park
Oriental Hotel

Oriental Hoteltokyo bay

Namba
Oriental Hotel

Hotel Nikko
AlivilaOriental Hotel
Hiroshima

Number of operating days

-

182

182

182

182

182

(A) Real estate operating revenue subtotal

9,390,971

401,804

798,421744,653487,673

206,441

Fixed rent

5,616,251

322,950

315,799

398,950

402,049

170,752

Variable rent

3,338,852

78,000482,621345,70385,62335,689Other revenue

435,866

854

-

-

-

-

(B) Real estate operating costs subtotal

2,985,368

321,489

306,585

142,659

232,354

61,075Land lease and other rent expenses

287,175

110,017--

42,074-

Property taxes

561,728

27,451

57,686

48,10629,735

20,769Outsourcing expenses

236,669

480

480

480

960

480

Property name

Nonlife insurance

18,903

1,672

1,606

677

1,187

546

Depreciation and amortization

1,603,918

180,628

246,306

91,064

154,072

37,859Loss on retirement of noncurrent assets

5,053

-

-

1,823

3,158

-

Other costs

271,919

1,239

506

506

1,166

1,419

(C) Net real estate operating income = (A) − (B)6,405,603

80,314

491,835

601,993

255,318

145,365(Reference) Occupancy rate

99.9%

100.0%

100.0%

100.0%

100.0%

100.0%(Reference) Number of tenants

117

1

1

1

1

1

Property No.

6

8

ibis
The Beach Tower
Tokyo Shinjuku
Okinawa(Note 1)

Property name

9

10

12

13

HakoneSetsugetsuka

Dormy Inn
Kumamoto

the bsuidobashi

Dormy Inn
EXPRESSAsakusa

Number of operating days

182

182

182

182

182

182

(A) Real estate operating revenue subtotal

410,069

255,515

147,472

97,23062,43631,997

Fixed rent

45,786

255,504

147,169

97,23042,49931,697

Variable rent

216,178---

19,936-

Other revenue

148,105

11

302

-

-

300

(B) Real estate operating costs subtotal

127,481

83,28653,26230,86017,261

10,544

Land lease and other rent expenses

-

-

-

-

-

-

Property taxes

16,716

19,537

11,171

9,720

3,994

2,993

Outsourcing expenses

46,681

-

-

-

600

600

Nonlife insurance

318

625

326

229

98

61

Depreciation and amortization

33,866

61,88641,336

19,901

11,764

6,164

Loss on retirement of noncurrent assets

-

-

-

-

-

-

Other costs

29,898

1,236

428

1,008

804

724

(C) Net real estate operating income = (A) − (B)282,588

172,228

94,20966,36945,175

21,453(Reference) Occupancy rate

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%－60 －(Reference) Number of tenants

4

1

61

1

1

1

1

Property No.

14

15

Hakata Nakasu
Nara
Washington Hotel Washington Hotel
Property name
Plaza
Plaza
(Note 2)
(Note 2)
Number of operating days
182
182

16

17

18

22

R&B Hotel
Ueno
Hirokoji

R&B Hotel
HigashiNihonbashi

Comfort HotelTokyo Higashi
Nihombashi

Smile Hotel
Nihombashi
Mitsukoshimae

182

182

182

182

(A) Real estate operating revenue subtotal

120,000

75,00048,647

61,103135,057

85,751

Fixed rent

120,000

73,00048,252

61,103

129,454

67,200

Variable rent

-

-

-

-

-

18,551Other revenue

0

1,000

394

-

5,602

-

(B) Real estate operating costs subtotal

21,00028,00013,763

17,794

32,636

17,327

Land lease and other rent expenses

-

-

-

2,700

-

-

Property taxes

6,000

6,000

5,941

4,290

13,151

6,087

Outsourcing expenses

0

1,000

420

600

807

600

Nonlife insurance

0

0

88

107

216

106

Depreciation and amortization

13,00020,000

6,544

9,421

17,837

9,434

Loss on retirement of noncurrent assets

-

-

-

-

-

-

Other costs

0

0

768

675

623

1,098

(C) Net real estate operating income = (A) − (B)98,00046,00034,88343,309102,420

68,424(Reference) Occupancy rate

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%(Reference) Number of tenants

1

2

1

1

2

1

Property No.

24

25

26

29

30

31

Property nameToyoko Inn
Hakata-guchi
EkimaeHotel Vista
Kamata Tokyo

Chisun Inn
KamataHotel Keihan
Universal City

Hotel Sunroute
Shinbashi

HiltonTokyo Bay

Number of operating days

182

182

182

182

182

182

(A) Real estate operating revenue subtotal

70,51946,802

38,665631,559245,243

940,423

Fixed rent

70,51946,767-

Variable rent--

38,665

Other revenue

-

35

-

(B) Real estate operating costs subtotal

17,19018,722

9,713

80,00638,970231,695

Land lease and other rent expenses

-

-

-

10,555-

66,128Property taxes

5,194

5,949

2,321

22,56912,46968,723

Outsourcing expenses

540

600

540

2,869

2,355

12,483Nonlife insurance

136

120

51

721

176

1,824

Depreciation and amortization

10,695

11,442

5,876

41,991

10,57181,451

Loss on retirement of noncurrent assets

-

-

-

-

-

-

Other costs

624

609

924

1,299

13,3971,084(C) Net real estate operating income = (A) − (B)53,32928,07928,952551,552

206,273

708,727(Reference) Occupancy rate

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%(Reference) Number of tenants

1

1

1

1

4

1

－

62 －

Undisclosed（Note 3）
Undisclosed（Note 3）
Undisclosed（Note 3）

141,133

87,80516,305

Undisclosed（Note 3）
Undisclosed（Note 3）
Undisclosed（Note 3）

Property No.

32

33

34

35

36

37

Property name

ibis Styles
Kyoto Station(Note 1)

ibis Styles
Sapporo(Note 1)

MercureSapporo(Note 1)

MercureOkinawa Naha
(Note 1)the bakasaka-mitsuke

the bikebukuro

Number of operating days

182

182

182

182

182

182

(A) Real estate operating revenue subtotal

270,798

269,696

301,742

216,207

149,809

188,222

Fixed rent

21,167

13,13331,502-

68,191

108,418

Variable rent

247,831238,090

212,680

210,735

81,61779,804

Other revenue

1,800

18,47357,559

5,472

-

-

(B) Real estate operating costs subtotal

44,28995,590136,492

68,084

16,316

21,339Land lease and other rent expenses

-

-

-

147

-

-

Property taxes

9,000

18,25524,192

11,532

3,760

4,975

Outsourcing expenses

16,441

22,49727,65426,659600

600

Nonlife insurance

211

437

521

331

124

221

Depreciation and amortization

16,85436,09839,22025,041

10,321

14,573

Loss on retirement of noncurrent assets

-

-

-

-

-

-

Other costs

1,780

18,30144,904

4,371

1,509

969

(C) Net real estate operating income = (A) − (B)226,508

174,105

165,249

148,123

133,492

166,883(Reference) Occupancy rate

100.0%

99.4%

98.1%

100.0%

100.0%

100.0%(Reference) Number of tenants

2

5

14

1

2

4

Property No.

38

39

40

41

42

43

Property namethe bochanomizu

the bhachioji

the bhakataHotel Francs

MercureYokosuka

Okinawa
MarriottResort & Spa

Number of operating days

182

182

182

182

182

182

(A) Real estate operating revenue subtotal

55,477112,230

108,235

150,000

162,939

274,999

Fixed rent

34,50062,50643,507150,000-

274,999

Variable rent

20,97747,00264,727-

141,749-

Other revenue

-

2,721

-

-

21,190-(B) Real estate operating costs subtotal

7,724

20,035

14,174

40,52658,968138,111Land lease and other rent expenses

-

-

-

-

-

-

Property taxes

1,549

5,383

2,348

15,026

9,123

20,798Outsourcing expenses

600

600

1,226

900

8,783

1,200

Nonlife insurance

66

241

125

515

1,148

1,295

Depreciation and amortization

4,739

12,023

9,496

23,834

14,842

108,265

Loss on retirement of noncurrent assets

-

-

70

-

-

-

Other costs

769

1,786

906

251

25,0706,552(C) Net real estate operating income = (A) − (B)47,752

92,194

94,060109,473

103,971

136,888(Reference) Occupancy rate

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%(Reference) Number of tenants

1

13

2

1

1

1

63

Property No.

44

45

46

ACTIVE-INTERCITY
HIROSHIMACANDEOHOTELS
UENO-KOEN(Note 4)

Hotel Centraza
Hakata(Note 5)

Number of operating days

182

182

182

(A) Real estate operating revenue subtotal

656,203134,736

196,364

Fixed rent

386,815

Variable rent

135,780

Other revenue

133,606(B) Real estate operating costs subtotal

272,268

17,907

118,270

Land lease and other rent expenses--

55,551

Property taxes

29,059--Outsourcing expenses

52,247600

1,000

Nonlife insurance

1,851

218

330

Depreciation and amortization

90,434

16,31857,526

Loss on retirement of noncurrent assets

-

-

-

Other costs

98,675771

3,862(C) Net real estate operating income = (A) − (B)383,934

116,828

78,093(Reference) Occupancy rate

100.0%

100.0%

100.0%(Reference) Number of tenants

37

1

1

Property name

Undisclosed(Note 3)-99,99996,364

Undisclosed(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)(Note 3)-

Variable rent includes income from management contracts. For details of the management contract, please refer to “D. Overview of the hotelbusiness; (1) Rent structures of hotels with variable rent, management contract or revenue sharing” on page 68.
Consent on disclosure of rent in units of thousand yen has not been obtained from the lessee and is thus rounded down to the nearest million yen.
Rent income, etc. is not disclosed as consent on disclosure has not been obtained from the tenant with whom a lease contract has been concluded andthus considered to be a case where disclosure cannot be made due to unavoidable circumstances.
CANDEO HOTELS UENO-KOEN was acquired as of February 1, 2016.
Hotel Centraza Hakata was acquired as of April 1, 2016.
The property numbers of assets that were transferred before the end of the previous fiscal year are intentionally omitted.

－

64 －

C. Status of portfolio diversification
a. Diversification by hotel type
The total annual rent, the total of acquisition price and the investment ratio by the hotel type of the assets held at the endof the midterm period under review were as follows:
Total annual rent
Acquisition priceInvestment ratio
Hotel type
(Note 2)
(Note 3)(Note 4)(Note 1)
(JPY1M)(JPY1M)(%)
Limited-service hotel

8,182

97,87340.8

Full-service hotel

5,826

64,172

26.8

Resort hotel

6,480

77,580

32.4

Total

20,489239,626

100.0

b. Diversification by geographical area
The total annual rent, the total of acquisition price and the investment ratio by the geographical area of the assets held at
the end of the midterm period under review were as follows:
Total annual rent
Acquisition priceInvestment ratio
Geographical area
(Note 2)
(Note 3)(Note 4)(Note 5)
(JPY1M)(JPY1M)(%)
Hokkaido

1,299

12,797

5.3

Tokyo

3,333

50,010

20.9

Kanto (excluding Tokyo)

4,693

54,775

22.9

Kansai

4,287

40,55016.9

Chugoku

1,517

21,420

8.9

Kyushu (excluding Okinawa)

1,525

15,613

6.5

Okinawa

3,833

44,460

18.6

Total

20,489239,626

100.00c. Diversification by hotel grade
The total annual rent, the total of acquisition price and the investment ratio by the hotel grade of the assets held at the endof the midterm period under review were as follows:
Total annual rent
Hotel grade(Note 2)
(JPY1M)

Acquisition price(Note 3)
(JPY1M)

Investment ratio(Note 4)(%)

Luxury4,756

62,27026.0Upper-middle

2,680

29,95012.5

Mid-price

12,016

133,311

55.6

Economy1,036

14,094

5.9

Total

20,489239,626

100.0

d. Diversification by building age
The total annual rent, the total of acquisition price and the investment ratio by the building age of the assets held at theend of the midterm period under review were as follows. The building age is the period from the date stated as the date of
new construction on the registration or registration record to the last day of June 2016:
Total annual rent
Acquisition priceInvestment ratio
Building age(Note 2)
(Note 3)(Note 4)
(JPY1M)(JPY1M)(%)
More than 5 years,
less than 10 years (inclusive)
More than 10 years,
less than 20 years (inclusive)

4,891

61,372

25.6

3,955

50,31621.0

65

More than 20 years

11,643

127,938

53.4

Total

20,489239,626

100.0

e. Diversification by remaining contract term
The total annual rent and the ratio of the total annual rent of the concerned properties to the total annual rent of all assets
held at the end of the midterm period under review by the remaining contract term of the assets held at the end of themidterm period under review were as follows, where the remaining contract term is the period from the last day of June
2016 to the lease contract expiration date:
Total annual rent
Remaining contract term
(Note 2)
(JPY1M)
Less than 5 years (inclusive)
13,640More than 5 years,
4,029
less than 10 years (inclusive)
More than 10 years,
2,819
less than 20 years (inclusive)
Total
20,489Ratio of total annual rent
to total
(%)
66.6
19.7
13.8
100.00f. Diversification by rent type
The total annual rent and the ratio of the total annual rent of the concerned properties to the total annual rent of all assets
held at the end of the period under review by the rent type of the assets held at the end of the midterm period under review
were as follows, where fixed rent refers to fixed rent contracts and variable rent, etc. refers to variable rent contracts andmanagement contracts:
Rent type
Fixed rent
Variable rent, etc.
Total

Total annual rent
(Note 2)
(JPY1M)
11,532
8,957
20,489(Note 1)
(Note 2)

Ratio of total annual rent
to total
(%)
56.3
43.7
100.0

Hotels are categorized as limited-service hotels, full-service hotels or resort hotels according to the manner of operation.
“Total annual rent” is the amount arrived at when the monthly rent income, etc. (rent of the building itself only, excluding signage andparking usage fees; not factoring in any change in rent during the fiscal period under review) of the assets under management at the endof the midterm period under review is multiplied by 12.
However, the assumptions of the total annual rent of the hotels with revenue sharing, with variable rent or operated under amanagement contract structure are as follows:
The Five HMJ Hotels
The amount of (i) the variable rent actually generated from January 1, 2016 to June 30, 2016 andOkinawa Mariott Resort & Spa
the amount of variable rent calculated based on forecast GOP from July 1, 2016 to December 31,
Sheraton Grand Hiroshima Hotel
2016, plus (ii) the amount arrived at when the monthly fixed rent at the end of the midterm period
under review is multiplied by 12.
The amount of (i) the total amount of income from management contracts or variable rent actually
generated in the six-month period from January 1, 2016 to June 30, 2016 and income frommanagement contracts or variable rent calculated based on forecast GOP from July 1, 2016 to
The Six Accor Hotels
December 31, 2016 for the hotel portion, plus (ii) the amount arrived at when the monthly rent
income, etc. of each tenant for the retail tenant portion at the end of the midterm period underreview is multiplied by 12.
The amount of (i) the variable rent actually generated from January 1, 2016 to June 30, 2016, plus(ii) the amount of the variable rent calculated based on forecast GOP from July 1, 2016 to
The Six the b Hotels
December 31, 2016, plus (iii) the amount arrived at when the monthly fixed rent at the end of themidterm period under review is multiplied by 12.
The amount of (i) the variable rent calculated based on actual GOP from January 1, 2016 to June
Hotel Centraza Hakata
30, 2016 and forecast GOP from July 1, 2016 to December 31, 2016, plus (ii) the amount arrived
at when the monthly fixed rent at the end of the midterm period under review is multiplied by 12.
The amount of (i) variable rent calculated based on sales forecast from January 1, 2016 to
Hotel Vista Kamata Tokyo
December 31, 2016, plus (ii) the amount arrived at when the monthly fixed rent at the end of the
Hilton Tokyo Bay
midterm period under review is multiplied by 12.
The amount of (i) the amount arrived at when the variable rent actually generated during the sixChisun Inn Kamata
month period from January 1, 2016 to June 30, 2016, plus (ii) the variable rent calculated basedon sales forecast from July 1, 2016 to December 31, 2016, plus (iii) the amount arrived at whenthe monthly fixed rent as of the end of the midterm period under review is multiplied by 12.
Smile Hotel Nihombashi
The amount of (i) the variable rent actually generated in the six-month period from January 1,
Mitsukoshimae2016 to June 30, 2016, plus (ii) the amount arrived at when the monthly fixed rent at the end of
Hotel Keihan Universal City
the midterm period under review is multiplied by 12.
Hotel Sunroute Shinbashi
For details of the contracts of the hotels with revenue sharing, with variable rent or operated under a management contract structure,please refer to “D. Overview of the hotel business; (1) Rent structures of hotels with variable rent, management contract or revenue
sharing” on page 68.
(Note 3) “Acquisition price” is the acquisition price stated on the purchase and sale agreement for beneficial interest in trust or real estatepurchase and sale agreement (consumption tax, local consumption tax and the acquisition expense such as broker’s fee are notincluded). The acceptance prices are indicated for the properties that have been accepted from the former JHR.

－

66 －

(Note 4)(Note 5)“Investment ratio” is the ratio of total acquisition price of the assets held at the end of the midterm period under review that are of therespective type to the total of acquisition price of all assets held at the end of the midterm period under review, rounded off to one
decimal place.
Tokyo means Tokyo metropolitan area. Kanto (excluding Tokyo) means Kanagawa, Chiba, Saitama, Ibaraki, Gunma, Tochigi and
Yamanashi prefectures. Kansai means Kyoto, Osaka, Shiga, Hyogo, Nara and Wakayama prefectures. Chugoku means Hiroshima,
Okayama, Tottori, Yamaguchi and Shimane prefecture. Kyushu (excluding Okinawa) means Fukuoka, Nagasaki, Miyazaki, Kumamoto,
Saga, Oita and Kagoshima prefecture. Okinawa means Okinawa prefecture.

67

D. Overview of the hotel business(1) Rent structures of hotels with variable rent, management contract or revenue sharing
Property
No.

The
Eight
HMJ
HotelsThe Six
Accor
HotelsThe Six
the b
HotelsOther
hotelswithvariablerentorrevenuesharing

Name

Rent type

Method of calculating variable rent and income from management contracts

Variable/Fixed

When total GOP of the five HMJ hotels exceeds GOP base amount(set at ¥3,351 million / year), the amount arrived at when the amountexceeding GOP base amount is multiplied by 85.0% (Note 1).
GOP base amount is set individually for each hotel for such purposes as
payment of variable rent from each hotel. The breakdown of GOP baseamount is presented below (Note 2).

1

Kobe Meriken Park Oriental Hotel

2

Oriental Hotel tokyo bay

3Namba Oriental Hotel

4

Hotel Nikko Alivila

5

Oriental Hotel Hiroshima

43

Okinawa Marriott Resort & Spa

Variable/Fixed44

ACTIVE-INTER CITY HIROSHIMA(Sheraton Grand Hiroshima Hotel)

Variable/Fixed(Note 3)46

Hotel Centraza Hakata

Variable/Fixed

6

ibis Tokyo Shinjuku

32

ibis Styles Kyoto Station

33

ibis Styles Sapporo

34

Mercure Sapporo

35

Mercure Okinawa Naha

42

Mercure Yokosuka

12

the b suidobashi

36

the b akasaka-mitsuke

37

the b ikebukuro38

the b ochanomizu

39

the b hachioji

40

the b hakata

22

When hotel GOP exceeds GOP base amount (set at ¥700 million / year),
the amount arrived at when the amount exceeding GOP base amount ismultiplied by 90.0%
When hotel GOP exceeds GOP base amount (set at ¥468 million / year),
the amount arrived at when the amount exceeding GOP base amount ismultiplied by 82.5%
When hotel GOP exceeds GOP base amount (set at ¥425 million / year),
the amount arrived at when the amount exceeding GOP base amount ismultiplied by 90.0%
Amount equivalent to GOP
Amount equivalent to GOP

Management
contract(Note 4)

Amount equivalent to GOP
Amount equivalent to GOP
Amount equivalent to GOP

VariableAmount linked to GOP

Variable/Fixed

Amount linked to GOP (Note 5)

Smile Hotel Nihombashi Mitsukoshimae

Fixed +
Revenue sharing

25

Hotel Vista Kamata Tokyo (Note 6)

Fixed +
Revenue sharing

26

Chisun Inn Kamata

29

Hotel Keihan Universal City

30

Hotel Sunroute Shinbashi

31

Hilton Tokyo Bay

Amount that is a certain percentage of sales exceeding the threshold(Note 5)
When hotel total sales from January 1 to December 31 of every year
exceeds ¥270 million, the amount arrived at when the amount exceeding¥270 million is multiplied by 32.5%
Amount that is the monthly GOP multiplied by 85.0%(¥0 if the amount is below ¥0).
Amount that is a certain percentage of sales exceeding the threshold(Note 5)
Amount that is a certain percentage of sales exceeding the threshold(Note 5)
Amount that is a certain percentage of sales exceeding the threshold(Note 5)(Note 1)
(Note 2)

Annual GOP base amount

Kobe Meriken Park Oriental Hotel¥599,900 thousand

Oriental Hotel tokyo bay¥693,200 thousand

Namba Oriental Hotel¥832,200 thousand

Hotel Nikko Alivila¥995,700 thousand

Oriental Hotel Hiroshima¥230,000 thousand

Total(Note 5)

Fixed +
Revenue sharing
Fixed +
Revenue sharing
Fixed +
Revenue sharing

Concerning a fixed-term lease agreement on the five HMJ hotels, the variable rent ratio was changed from 81.5% to 85.0% effective as ofJanuary 1, 2016.
Breakdown of the GOP base amount set individually for the five HMJ hotels
Hotel name(Note 3)(Note 4)

Variable¥3,351,000 thousand

The indicated figures are for Sheraton Grand Hiroshima Hotel, the main facility of ACTIVE-INTER CITY HIROSHIMA.
The management contract structure is a structure for hotel real estate owned by JHR in which JHR entrusts an operator to operate the hotel andtakes in the outcome of that business as real estate operating revenue. Specifically, JHR, the owner of the hotel real estate, concludes amanagement contract with an operator and entrusts the operator with the tasks necessary to run the hotel business. JHR receives the hotelrevenue achieved from the hotel business (operation) by the operator and, at the same time, pays a management fee to the operator. This hotelrevenue achieved is recognized as “real estate operating revenue through management contract” and is equivalent to the rent that is the realestate operating revenue under the leasing structure.
The detailed content of the contract is not disclosed as consent on disclosure has not been obtained from the lessee.

－

68 －

(2) Major indicators of the hotel business
The following tables indicate the figures related to the hotel business of the eight HMJ hotels, the six Accor hotels and thesix the b hotels for the operating period from January 1, 2016 through June 30, 2016, based on the data provided by the hotel
lessees etc. Furthermore, while these indicators of the hotels are among the indicators that show the operating status of therooms departments, they do not necessarily represent the operating revenue and the ability to bear rent, etc. of the respective
hotels, as the daily rates and profit margins, etc. of the respective rooms available for sale are not uniform, among otherreasons. As such, the indicators are no more than the reference figures.
(a) The Eight HMJ Hotels
Kobe
Oriental Hotel
Namba
Meriken Park
tokyo bay
Oriental Hotel
Oriental Hotel
Ratio toRatio toRatio to
total
total
total
sales
sales
sales
(%)
(%)
(%)

Hotel Nikko
Alivila

The Five HMJ
HotelsTotal/Average
Ratio toRatio to
total
total
sales
sales
(%)
(%)

Oriental Hotel
Hiroshima

Ratio to
total
sales
(%)

Occupancy rate

73.6%

－

94.9%

－

91.4%

－

81.4%

－

77.4%

－

84.9%

－

ADR
(Note 1)

17,206－

19,264－

19,612－

20,862

－

8,927

－

18,086－

RevPAR(Note 2)

12,669－18,279－17,916－

16,984

－

6,911

－

15,356－

Total sales

2,465

100.0

3,454

100.0

1,386

100.0

2,421

100.0

1,025

100.0

10,751

100.0

Rooms department

810

32.9

1,845

53.4

927

66.8

1,350

55.8

314

30.7

5,246

48.8

Food & beveragedepartment

1,510

61.2

1,390

40.3

72

5.2

861

35.6

679

66.2

4,512

42.0

Tenant department

30

1.2

122

3.5

369

26.6

1

0.0

11

1.1

533

5.0

Other departments(Note 3)

115

4.7

97

2.8

19

1.4

208

8.6

20

2.0

461

4.3

392

15.9

914

26.5

823

59.3

599

24.7

157

15.3

2,884

26.8

GOP

Okinawa
Sheraton Grand Hotel Centraza
Marriott Resort
Hiroshima Hotel
Hakata& Spa(Note 4)(Note 5)(Note 4)
Ratio toRatio toRatio to
total
total
total
sales
sales
sales
(%)
(%)
(%)
Occupancy rate

83.2%

－

83.2%

－

89.6%

－

ADR
(Note 1)

15,352－

16,554

－

9,919

－

RevPAR(Note 2)

12,771－

13,780

－

8,884

－

Total sales

1,607

100.0

1,369

100.0

1,155

100.0

Rooms department

926

57.6

657

48.0

345

29.9

Food & beveragedepartment

494

30.7

676

49.4

687

59.4

Tenant department

26

1.6

5

0.3

114

9.9

Other departments(Note 3)

161

10.0

31

2.3

9

0.8

347

21.6

389

28.4

393

34.0

GOP
(Note 1)
(Note 2)

(Note 3)(Note 4)(Note 5)(Note 6)

ADR: Represents average daily rate, which is calculated by dividing total rooms revenue for a certain period (excluding service charges) by the
total number of rooms sold during the period. The same shall apply hereinafter.
RevPAR: Represents revenue per available room, which is calculated by dividing total rooms revenue for a certain period (excluding service
charges) by the total number of rooms available for sale during the period. Revenue per available room equals the product of ADR andoccupancy rate. The same shall apply hereinafter.
Figures for the other departments include sales of the department for sale of goods.
The indicated figures are for Sheraton Grand Hiroshima Hotel, the main facility of ACTIVE-INTER CITY HIROSHIMA.
For Hotel Centraza Hakata, which JHR acquired on April 1, 2016, the annual figures are for throughout the year including those prior to theacquisition.
The occupancy rate is rounded off to one decimal place, while ADR and RevPAR are rounded off to single units. Sales and GOP are rounded
off to the nearest million yen. For the ratio to total sales, the ratio of sales in each department to total sales is rounded off to one decimal place.
The same shall apply hereinafter.

69

(b) The Six Accor Hotels
ibisTokyo Shinjuku

ibis Styles
Kyoto Station

Ratio to
total
sales
(%)

ibis Styles
SapporoRatio to
total
sales
(%)

MercureSapporoRatio to
total
sales
(%)

MercureOkinawa Naha

Ratio to
total
sales
(%)

Mercure Yokosuka

Ratio to
total
sales
(%)

Total/Average(Note 1)

Ratio to
total
sales
(%)

Ratio to
total
sales
(%)

Occupancy rate

77.5%

－

95.7%

－

88.3%

－

79.1%

－

81.2%

－

91.2%

－

85.0%

－

ADR

12,597－

11,118

－

8,635

－

11,006－

10,613－

12,250－10,833－

RevPAR

9,757－

10,637

－

7,625

－

8,710

－

8,613

－

11,170

－

9,206

－

Total sales

406

100.0

464

100.0

490

100.0

546

100.0

489

100.0

569

100.0

2,965

100.0

Rooms
department

365

90.0

416

89.7

386

78.7

452

82.8

408

83.3

325

57.1

2,352

79.3

Food &
beveragedepartment

33

8.3

45

9.8

92

18.8

89

16.2

69

14.0

231

40.6

559

18.9

Other
departments

7

1.7

3

0.6

12

2.4

6

1.0

13

2.7

13

2.3

53

1.8

216

53.2

248

53.4

238

48.6

212

38.9

216

44.2

169

29.7

1,300

43.8

GOP
(Note 1)

For Total/Average, figures are calculated by JHR since no figures have been provided by the hotel operators or hotel lessees.

(c) The Six the b Hotels
the bsuidobashi

the bakasaka-mitsuke

Ratio to
total
sales
(%)

the b
ikebukuro

Ratio to
total
sales
(%)

the b
ochanomizu

Ratio to
total
sales
(%)

the b
hachioji

Ratio to
total
sales
(%)

the b
hakataRatio to
total
sales
(%)

Total/Average(Note 1)

Ratio to
total
sales
(%)

Ratio to
total
sales
(%)

Occupancy rate

85.3%

－

88.4%

－

90.2%

－

89.7%

－

90.3%

－

95.3%

－

90.4%

－

ADR

11,450－12,240－11,122－

11,098

－

7,361

－

7,519

－

9,646

－

RevPAR

9,768－

10,818－10,034

－

9,952

－

6,645

－

7,167

－

8,720

－

Total sales

177

100.0

242

100.0

323

100.0

131

100.0

291

100.0

230

100.0

1,394

100.0

Rooms
department

176

99.3

240

99.2

320

99.1

130

99.4

237

81.6

228

99.3

1,332

95.5

Food &
beveragedepartment

－

－

－

－

－

－

－

－

52

17.9

－

－

52

3.7

Other
departments

1

0.7

2

0.8

3

0.9

1

0.6

2

0.5

2

0.7

10

0.7

89

50.5

144

59.7

176

54.5

61

46.2

105

36.1

116

50.3

691

49.6

GOP
(Note 3)

For Total/Average, figures are calculated by JHR since no figures have been provided by the hotel lessees.

－

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E. Status of capital expenditures
a. Planned capital expenditures (Note)
The following table shows major planned capital expenditures for renovation work during the fiscal year as of the end of themidterm period under review for real estate properties under management by JHR. The estimated construction costs below
include the portion expensed in accounting. Capital expenditures are expected to total ¥1,753 million for the second half and,in aggregate with the capital expenditures for the first half, capital expenditures are expected to total ¥2,885 million for thefull year.
Name of property, etc.
(Location)

Purpose

Kobe Meriken Park Oriental Hotel(Kobe-shi, Hyogo)

Renewal of sky lounge “Kou’s” andrenovation of elevator halls and pathways
on the 14th floor

Hotel Nikko Alivila(Yomitan-son, Nakagami-gun,
Okinawa)
ibis Tokyo Shinjuku(Shinjuku-ku, Tokyo)
ibis Tokyo Shinjuku(Shinjuku-ku, Tokyo)
Hilton Tokyo Bay(Urayasu-shi, Chiba)

Renewal of guest rooms on the 9th floor

Scheduled period

Estimated
construction costs(JPY1M)

From June 2016
to August 201680

From May 2016
to June 201655

From May 2016

Replacement of piping

83

to July 2016

Replacement of interior fittings and furnitureand prefabricated bathrooms in guest rooms
on the 3rd through 10th floors

Renewal of disaster prevention facilities

From May 2016
to July 2016164

From January 201692

to August 2016

Total

474

(Note) For new construction and renewal work, include those for buildings, attached facilities, etc. as well as items classified as furniture and fixtures. The
scheduled period of the above planned renovationr work and whether or not the renovation work will be performed may change.

b. Capital expenditures during the period (Note)
For real estate properties under management by JHR, major construction work conducted during the midterm period underreview that represents capital expenditures is as below. Capital expenditures for the midterm period under review totaled¥1,132 million, and repair costs that were accounted for as expense in the current period totaled ¥18 million. In aggregate,¥1,151 million of construction work was carried out.
Name of property, etc.
(Location)

Purpose

PeriodKobe Meriken Park
Oriental Hotel(Kobe-shi, Hyogo)

Renewal of guest rooms on the 7th floor

Kobe Meriken Park
Oriental Hotel(Kobe-shi, Hyogo)
Oriental Hotel tokyo bay(Urayasu-shi, Chiba)
Namba Oriental Hotel(Osaka-shi, Osaka)
Hilton Tokyo Bay(Urayasu-shi, Chiba)

Renovation of guest room balconies

Renewal of guest rooms on the 4th floor
Renewal of guest rooms on the 9th floor
Replacement of emergency power generator

Okinawa Marriott Resort &Spa
Renewal of hotel operation systems(Nago-shi, Okinawa)

Construction costs(JPY1M)

From January 2016
to March 2016
From January 2016
to April 2016
From January 2016
to March 2016
From January 2016
to February 2016
From February 2016
to April 2016
From November 2015
to May 2016

Total

50

62

101
91
60

55

420

(Note) New construction and renewal work will include those for buildings, attached facilities, etc. as well as items classified as furniture and fixtures.

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