[For Information Purpose Only
The Japanese language press release should be referred to as the original.]
July 27, 2020
To All Concerned Parties
Name of REIT Issuer:
Invincible Investment Corporation
Naoki Fukuda, Executive Director(Securities Code: 8963)
Asset Manager:
Consonant Investment Management Co., Ltd.
Naoki Fukuda, President & CEO
Contact: Jun Komo
General Manager of Planning Department(Tel. +81-3-5411-2731)

Performance Update for June 2020
Invincible Investment Corporation (“INV”) hereby announces its monthly performance.
1. Overall Performance of the Entire Portfolio
Similar to the previous month, both the domestic and overseas hotel portfolios for June 2020
continue to be heavily affected by the decline in tourism and the economy from the coronavirus(COVID-19), while the residential portfolio continues to perform well with minimal negative
impacts from COVID-19.
As announced in “Notice concerning Conclusion of Memorandum of Understanding to Amend
the Fixed-term Building Lease and Property Management Agreement with Major Tenants” dated
May 11, 2020, INV entered into a Memorandum of Understanding (“MOU”) to amend each fixedterm building lease and property management agreement for domestic hotels owned by INV
and operated by INV's main tenant, MyStays Hotel Management Co., Ltd. and its affiliates(“MHM Group”). Under the MOU, INV shall bear the property management costs from March
to June 2020 and increase the amount of management fees payable to the MHM Group. The
amount to be borne by INV has been concretely agreed, and the NOI of domestic hotels
operated by the MHM Group has been determined. As a result, the overall Portfolio NOI1,2,3 forJune 2020 decreased by 97.9% compared to the same month last year and decreased by 78.0%
cumulatively for the June 2020 fiscal period (January to June) compared to the same period lastyear.
The following are the details by segment.

This English language notice is a translation of the Japanese-language notice released on July 27, 2020 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

12. Hotel Assets Overview(1) Domestic Hotels
The domestic hotel portfolio4 performance for the month of June 2020 has shown year-overyear declines in Occupancy of 51.9pt, ADR of 45.1%, and RevPAR of 77.5%. The NOI2,3
for June 2020 decreased significantly as explained in the previous paragraph and for theJune 2020 fiscal period (January to June) decreased by 92.7% compared to the same period
last year.
The weak domestic hotel demand for June 2020 stems primarily from the pronounced impactof the COVID-19 pandemic that has caused a significant reduction in demand for hotels dueto the sharp decline in domestic and global travel. The constant news flow and government
warnings have contributed to a shift in mindset to refrain from business trips and leisuretravel. JNTO reported that inbound visitors declined by 99.9% in June (year-over-year).
In response to the significant reduction in hotel demand, MyStays, the main hotel operator
for INV, is continuing to thoroughly reduce hotel operation costs while reviewing its
operational strategy under the COVID-19 environment. MyStays is vigorously working tostimulate demand from existing domestic customers by following up on cancelled or
postponed functions and providing corporate customers with various options while
highlighting strict measures to reduce the spread of COVID-19. In addition, MyStays isfocusing on capturing new demand, including the provision of telework environments toprovide individuals and corporates with a comfortable telework space as well as
accommodation demand associated with the 14-day voluntary quarantine period after
returning to Japan.
As for temporary closure status of domestic hotels owned by INV, all hotels other than
MyCUBE by MYSTAYS Asakusa Kuramae have reopened by July 18. The temporary
closure status of hotels is described in Appendix 1.
The government lifted the request for voluntary restraints on cross-prefectural movement onJune 19, prompting an increase in economic activity and somewhat travel levels, however
there is still strong concern about a potential second wave of the spread of COVID-19. The
Go To Travel campaign commenced on July 22 and is part of a government stimulus
package that will subsidize domestic tourism expenses. The government unfortunately
announced recently that travel to and from Tokyo would be excluded from the program dueto the rising number of COVID-19 outbreaks in Tokyo. Therefore, we do not see a fullfledged recovery in hotel demand and are forecasting RevPAR in July 2020 to decrease byapproximately 70% year-over-year.

This English language notice is a translation of the Japanese-language notice released on July 27, 2020 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

2

Table below shows the KPIs for each area of the 75 domestic hotels portfolio4.
Area

Occupancy Rate5

ADR (JPY)6

RevPAR (JPY)7Tokyo 23 Wards

36.3%

5,195

1,886

Greater Tokyo (ex. Tokyo 23 Wards)

50.4%

4,636

2,339

Chubu

31.2%

4,865

1,518

Kansai

29.6%

4,586

1,360

Kyushu

39.0%

4,900

1,911

Hokkaido

19.7%

5,582

1,102

Other domestic

42.8%

8,082

3,463

Total

36.0%

5,200

1,873

(2) Cayman Hotels
In reaction to the worldwide spread of COVID-19, the Cayman Islands government closed
the Owen Roberts International Airport in Grand Cayman on Sunday March 22, 2020 at
11:59 PM. Accordingly, the Cayman Hotels have been closed since late March and are
expected to reopen on October 1, 2020 at the earliest. On a positive note, the Tortuga
Beach Grill & Bar at the Westin Grand Cayman Seven Mile Beach Resort & Spa and theSunshine Grill at the Sunshine Suites Resort reopened on June 19, 2020 to serve for local
customers.
The NOI2 for June 2020 significantly decreased and for the June 2020 fiscal period (January
to June) decreased by 72.2% compared to the same period last year.
3. Residential Assets Overview
The residential portfolio8 in-place occupancy rate as of the end of June 2020 was 95.6%, ayear-over-year decrease of 0.5pt. The rent increase program continues to show positive
results as the average in-place rent per tsubo as of the end of June 2020 increased by 0.7%
year-over-year. NOI9 for the residential portfolio in June 2020 increased by 0.1% year-overyear and increased by 2.0% year-over-year on a cumulative basis for the June 2020 fiscal
period (January to June).
Rents, compared with those based on the immediately preceding leases, increased by 0.7%
for new leases, 1.6% for renewal leases, and 1.3% for new and renewal leases combined
for the June 2020 fiscal period. INV achieved a rent increase on 46.6% of lease contract
renewals for the June 2020 fiscal period. The retention rate for the existing tenants
continues to be high at 80.7% for the June 2020 fiscal period.

This English language notice is a translation of the Japanese-language notice released on July 27, 2020 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

3

4. Performance(1) 75 Domestic Hotel Properties4
Cumulative (Jan.-June)
2019
(C－D)
(D)

June
2020
(A)

June
2019
(B)

(A－B)

YoY
ChangeOccupancy Rate5

36.0%

87.9%

-51.9pt-59.0%

48.1%

86.8%

-38.7pt-44.6%ADR (JPY)6

5,200

9,468

-4,268-45.1%

7,229

10,109-2,880-28.5%

RevPAR (JPY)7

1,873

8,323

-6,450-77.5%

3,478

8,772

-5,294-60.4%

Gross Revenue(JPY million)10

1,267

5,492

-4,225-76.9%

14,20533,809-19,604-58.0%

June
2019
(B)

(A－B)

YoY
Change

2020
(C)

YoY
Change(2) Cayman Hotels
June
2020
(A)

Cumulative (Jan.-June)
2020
(C)

2019
(D)

(C－D)

YoY
Change

0.0%

85.5%

-85.5pt-100.0%

37.5%

89.3%

-51.7pt-58.0%ADR (USD)6

0

303

-303

-100.0%

487

416

+72

+17.2%

RevPAR (USD)7

0

259

-259

-100.0%

183

371

-188

-50.7%

Gross Revenue(USD thousand)

50

7,248

-7,197-99.3%

26,66656,050-29,383-52.4%(A－B)

YoY
ChangeCumulative (Jan.-June)
2019
(C－D)
(D)

YoY
ChangeOccupancy Rate5(3) 60 Residential Properties8

Occupancy Rate
Rent per Tsubo
(JPY)

June
2020
(A)

June
2019
(B)

95.6%

96.1%

-0.5pt

-0.5%

96.2%

96.0%

+0.2pt

+0.2%

9,116

9,054

+62

+0.7%

9,097

9,045

+52

+0.6%

2020
(C)

This English language notice is a translation of the Japanese-language notice released on July 27, 2020 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

45. Portfolio NOI
2019 Simulated

NOI1,2 (JPY million)

NOI11
June
(JPY
million)

Ratio

2020

2019

Cumulative (Jan.-June)
YoY
Change

2020

2019

YoY
ChangeTokyo 23 Wards

5,980

19.4%

-9

429

-

579

3,025

-80.4%

Greater Tokyo (ex. Tokyo 23 Wards)

4,094

13.3%

22

312

-92.7%

977

2,003-51.2%

Greater Tokyo – Subtotal

10,075

32.7%

13

742

-98.1%

1,556

5,029

-69.1%

Chubu

2,791

9.1%

-21

168

-

-32

1,247

-

Kansai

1,775

5.8%

-22

129

-

-14

984

-

Kyushu

2,315

7.5%

2

118

-97.8%

-44

1,109

-

Hokkaido

3,442

11.2%

-128

418

-

-345

1,537

-

Other domestic

2,700

8.8%

68

158

-56.7%

-332

937

-

Domestic Hotel – Subtotal

23,100

75.0%

-86

1,736

-

787

10,846-92.7%

Residential

3,281

10.6%

274

273

+0.1%

1,657

1,625

+2.0%

Commercial

368

1.2%

28

30

-5.8%

180

183

-1.6%

Domestic Asset – Subtotal

26,750

86.8%

215

2,039

-89.4%

2,626

12,655-79.3%

Overseas

4,070

13.2%

-165

291

-

771

2,772

-72.2%

Total

30,820100.0%

49

2,331-97.9%

3,397

15,428-78.0%(Note 1) Based on all properties held as of the end of June 2020, excluding 9 hotels with fixed-rent lease agreements. 9 hotels
with fixed-rent lease agreements are D29 Super Hotel Shinbashi/ Karasumoriguchi, D33 Comfort Hotel Toyama, D36
Super Hotel Tokyo-JR Tachikawa Kitaguchi, D37 Super Hotel JR Ueno-iriyaguchi, D39 Comfort Hotel Kurosaki,
D40 Comfort Hotel Maebashi, D41 Comfort Hotel Tsubame-Sanjo, D42 Comfort Hotel Kitami, and D48 Takamatsu Tokyu
REI Hotel. NOI includes a simulated amount of dividend income from Kingdom TMK (the “TMK”) that owns Sheraton
Grande Tokyo Bay Hotel as an underlying asset. The fiscal periods of the TMK are semi-annual periods from April 1 to
September 30 and from October 1 to March 31 every year, and INV will receive the dividend within three months from theend of each semi-annual fiscal period of the TMK. Since INV does not receive a dividend from the TMK on a monthly
basis, the amount of dividend INV receives from the TMK for each month is a simulated figure, which is calculated bydeducting (i) simulated expenses such as operating expense of the TMK and the interest of debt (calculated dividing thebudget of the TMK for the fiscal period that includes the relevant month by the number of months in such fiscal period)
from (ii) NOI based on the performance of Sheraton Grande Tokyo Bay Hotel in the month which is three months before
the target month for this performance disclosure and multiplied by INV’s ownership ratio of the preferred equity interest in
the TMK (49.0%). The revenue from the Cayman Hotels is calculated at the exchange rate of US$1 to ¥110, which isthe exchange rate fixed by the acquisition of puts and selling calls, covering approximately 85% of expected cash flow
through December 31, 2020. Furthermore, NOI is provisional figure and subject to change when it is determined atfinancial closing; hereinafter the same.
(Note 2) NOI figures before acquisition by INV is based on the data obtained from third-parties including previous owners, and are
subject to change caused by the adjustments based on differences in accounting treatments, since it is difficult to adjust
them due to the timing even if the figures are based on actual performance; hereinafter the same.
(Note 3) Under the MOU, the total amount of property management costs and incremental management fees incurred by INV fromMarch to June 2020 totaled JPY 1,350 million, of which JPY 362 million for March, JPY 644 million for April, JPY 343
million for May and JPY 0 million for June. As a result, the domestic hotel NOI of each month was JPY -252 million for
March, JPY -642 million for April, JPY -416 million for May and JPY -86 million for June.
(Note 4) Based on 75 hotel properties; of the 84 domestic hotel properties (including Sheraton Grande Tokyo Bay Hotel, theunderlying asset of preferred equity interest held by INV) held as of the end of June 2020, 9 hotels with fixed-rent leaseagreements are excluded. As for Sheraton Grande Tokyo Bay hotel, NOI is based on the figure for the month which isthree months prior to the target month for this performance disclosure as INV will receive the dividend from the TMK within
three months of each fiscal period end for the TMK as described above. However, in consideration of seasonality, figuresother than NOI in the table above are based on the figures for June 2020; hereinafter the same.
(Note 5) “Occupancy Rate” for hotel portfolio is calculated using the following formula:This English language notice is a translation of the Japanese-language notice released on July 27, 2020 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

5

room occupancy rate = total number of rooms occupied during the relevant period ÷ (aggregate number of rooms during
the relevant period x number of business days during target period)(Note 6) “ADR,” or Average Daily Rate, is the value of the total room sales for a certain period (excluding service fees) divided by
the total number of sold rooms for the same period.
(Note 7) “RevPAR,” or Revenues Per Available Room, is calculated by dividing the total room sales for a certain period by theaggregate number of rooms for the same period (rooms x number of days), and is the same as product of room occupancy
rate and ADR.
(Note 8) Based on 60 properties held by INV as of the end of June 2020.
(Note 9) NOI excludes one-off insurance-related revenues and expenses.
(Note 10) Gross Revenue of Sheraton Grande Tokyo Bay Hotel used in the table is the whole gross revenue of such hotel, regardlessof INV’s ownership ratio of the preferred equity interest in the TMK (49.0%).
(Note 11) Based on 148 properties owned by INV as of the end of June 2020, assuming all properties were owned since thebeginning of 2019. Includes the dividend from preferred equity interest of TMK that owns Sheraton Grande Tokyo Bay
Hotel, assuming this dividend contributed throughout the June 2019 fiscal period and the December 2019 fiscal period of
INV. The revenue from the Cayman Hotels is calculated at the exchange rate of US$1 to ¥110.
(Note 12) Percentages are rounded to one decimal place. ADR, RevPAR and Rent per Tsubo are rounded to the nearest yen and
Gross Revenue is rounded down to the nearest million yen.
(Note 13) Cumulative occupancy rate for residential portfolio is calculated by dividing the sum of total leased area by the sum of total
leasable area at the end of each month and the percentages are rounded to one decimal place. Cumulative rent per tsubo
is calculated by dividing the sum of the total rental revenue including common area charges for each month by the sum of
total leased area (tsubo) at the end of each month.
(Note 14) For the details of performance for each hotel asset, please visit INV’s website:
https://www.invincible-inv.co.jp/en/portfolio/hotel.html

Website of INV: https://www.invincible-inv.co.jp/en/

This English language notice is a translation of the Japanese-language notice released on July 27, 2020 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

6

(Appendix 1)<Temporary Closure Status of Hotels Owned by INV>
Property
Number

Property Name

Location

Closed Date

End Date of
Closing Period

D79

MyCUBE by MYSTAYS
Asakusa Kuramae

Taito-ku,
Tokyo

March 8July 31(Planned)

D200

Westin Grand Cayman Seven
Mile Beach Resort & Spa

Cayman Islands

March 22

September 30(Planned)

D201

Sunshine Suites Resort

Cayman Islands

March 22

September 30(Planned)

Hotel That Consolidates
Operations During Close-

D3

Hotel MyStays Kyoto-Shijo

Kyoto-shi, Kyoto

May 1

June 30

D44

Hotel Epinard Nasu

Nasu-gun,Tochigi

April 28

May 31

D48

Takamatsu Tokyu REI Hotel

Takamatsu-shi,
KagawaApril 25

May 31

D53

Hotel MyStays
Sapporo Station

Sapporo-shi,
Hokkaido

March 18

July 17

D65

Art Hotel Ishigakijima

Ishigaki-shi,
Okinawa

April 20

May 31

D66

Hotel MyStays Fuji
Onsen Resort

Fujiyoshida-shi,
Yamanashi

May 1

June 11

D68

Hotel MyStays
Kanazawa Castle

Kanazawa-shi,Ishikawa

April 13

June 30

Hotel MyStays PremierKanazawa

D71

Hotel Nord Otaru

Otaru-shi,
Hokkaido

March 18

June 30

Hotel Sonia Otaru

D75

Hotel MyStays
Sapporo Susukino

Sapporo-shi,
Hokkaido

March 18

July 17

D76

Hotel Mystays
Sapporo Nakajima Park

Sapporo-shi,
Hokkaido

March 18

July 17

D77

Hotel MyStays
Sapporo Nakajima Park Annex

Sapporo-shi,
Hokkaido

March 6

July 17-

Sheraton GrandeTokyo Bay Hotel

Urayasu-shi,
Chiba

April 28

June 29

Hotel MyStays
Sapporo Aspen-

Hotel MyStays Premier
Sapporo Park-

This English language notice is a translation of the Japanese-language notice released on July 27, 2020 and was prepared solely for the convenience of, and reference by,
non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are
given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

7