Supplementarymaterials
Securities code 3488

Outline of the “Notice of Acquisition and Leasing ofDomestic Real Estate Trust BeneficialInterests(karaksa hotel Sapporo (20% quasi-coownership interest)” and “Notice of Revision ofInvestment Forecast and Distribution Forecast for thefiscal period ending February 2025 (14th FiscalPeriod)”
August 28, 2024

Overview of Asset Replacement┃ Points of the Asset Replacement┃ Realizing unrealized gains by selling the asset through the sponsor group's networkDifference between the Anticipated sales price and book value of the Asset to be transfer 185 million yen

 Acquired 20% quasi-co-ownership of the “karaksa hotel” operated by the sponsor group, using part of the funds by thetransfer aboveThe acquisition of a hotel specializing in lodging, which mainly targets inbound travelers, with a rent structure linked to room sales that can be expected to grow in terms of revenue.

Obtained preferential negotiation rights the remaining 80% of the quasi co-ownership interest from the seller as the seller is the sponsor, .

 The asset replacement will improve distributions and expand the asset size, etc.
Due to the contribution of gain on sale and the acquisition of the Asset to be acquired, the distribution amount per unit for the fiscal period ending February 2025 is expected to increase byapproximately 517 yen from the amount disclosed in April 2024.

Portfolio NOI in the cruising period is expected to increase by about 10.9 million yen┃Overview of the Asset Replacement┃
Asset to be Acquired
karaksa hotel Sapporo(20% co-ownership interest)

SellerScheduled acquisition date
Location
Construction date
Scheduled acquisition
priceAppraisal value(as of August 1, 2024)
Appraisal NOI yield

Asset to be transfered
XYMAX GROUP corporation
September 6, 2024
24, Minami-Sanjo Nishi 5-chome,Chuo-ku, Sapporo
November 17, 2017

XYMAX Mita Building

Transferee
Scheduled transfer date
Location
Construction dateNot disclosed
September 3, 2024
5-13-11, Shiba, Minato-ku, Tokyo
May 31, 1991

1.06 billion yen

Book value(As of February 29, 2024)

704 million yen

1.17 billion yen

Appraisal value(As of February 29, 2024)

771 million yen

Scheduled transfer price

890 million yen

5.2%2Estimated Distribution per unit for the 14th fiscal period
As a result of this asset replacement, the estimated distribution per unit for the 14th fiscal period is expected to be approximately 517yen
higher than the forecast as of April 18, 2024.
Expected distribution
for the 14th FP

3,631 yen per unit

+517 yen (+16.6%) compared to the forecast of April 18, 2024, and +61 yen (+1.7%) compared to the forecast of July 29, 2024

Forecast for the 14th Fiscal Period ending February 28, 2025
+517 yen(+16.6%)(yen)+61yen4,000(+1.7%)
Effect of theTransfer

Earnings from the Assetto be transferredduring the period

-59

3,500

19
Existing propertiy
Revenue

Earnings from the Assetto be acquired
One-time cost atduring the period time of acquisition

Non-deductible
Consumption tax-29

6

SGA expenses andNon-operating expenses-32

Existing properties
Revenue

-10

3,635

3,635

3,631

97

524

3,579

3,000

3,570

3,631

3,114

0
2,500

14th Fiscal Period(February 2025)
Forecast(Disclosed in April 2024)

14th Fiscal Period(February 2025)
Forecast(Disclosed in July 2024)

14th Fiscal Period(February 2025)
Forecast(As of the date of this revision)3

Outline of the Asset to be acquired karaksa hotel Sapporo

Target hotel from the Tanukikoji Shopping Street┃ Analysis by XYMAX REIT┃
 Location characteristics
 Located between Odori Park and Susukino in the center of Sapporo City, an
excellent location for sightseeing stays.
 Facing Tanukikoji Shopping Street, which has approximately 200 stores over a
total length of 900m, accessible via the underground shopping mall and arcade
directly connected to the nearest stations.
 Hotel characteristics
 Own brand operated by the sponsor group KARAKSA HOTELS. One of the six
hotels nationwide (as of August 2024)
 Room layout suitable for traveler needs and maximum number of connecting
rooms popular with families and groups
 In the Sapporo market, where there is a large difference between the demand foraccommodations in terms of seasonality and the number of users during the busy
season and the quiet season, high occupancy is maintained throughout the year due
to variable specifications that allow the use of up to six people.

┃ Key Indicators (FY2023) ┃ Annual average: Room occupancy rate 94.0%, ADR 17,150 yen, RevPAR 16,093 yen,
Average length of stay 1.86, Double occupancy ratio 2.26 persons
ADR（right axis）

OCC(left axis)

RevPAR（right axis）

100%

30,00080%

25,00020,00060%

15,00040%

10,000

20%

5,000

0%

0
Apr May JunJulAug Sep

Oct Nov Dec

Jan(yen)Feb Mar4

Characteristics of Karaksa Hotel Pursuing functions that meet a wide variety of accommodation needs, with tourists as the main target┃ Position of karaksa hotel┃ A segment specializing in accommodation for tourists, where there is a gap betweensupply and demand┃ Functions suitable for tourism purposes ┃[Assets]
 Mainly consists of guest rooms with a capacity of 3 people More than half of the guest rooms are connected rooms, making it possible toflexibly accommodate a variety of guests.
 Washrooms, shower booths, independent toilets, and under-bed storage etc. provides
comfort for multiple people staying for multiple nights.
[Services] Percentage of foreign nationals is over 40%, and diverse staff composition (12languages available)
 The reservation website is available in 6 languages, and non-contact payment isavailable in 5 languages for non-face-to-face check-in/out
 Promote efficient hotel operations by introducing automatic room allocation
systems and linking cleaning systems with core systems.

[Guestroom Composition][Example of indoor equipment][Hotel service example]┃ karaksa hotel Sapporo ┃Quadruple
6%

Double
18%
Twin
12%

Triple 64%

Connecting room 62%

Up to six guests can use the Guestroom byconnecting adjacent guest rooms

5KARAKSA HOTELS Operation StrategyIssues the hotel industry is facing

karaksa hotel Sapporo

Due to a lack of human resources and other factors, thesupply of guest rooms is not matching the increasing demandfor hotel accommodation, and this is becoming a burden on
sales of guest rooms.

Eliminate bottlenecks in guestroom supply through group-wide operations

KARAKSA HOTELSSAPPOROHotel
operation

Stop Room Selling, etc.

Hotel
operation×LinensupplyCleaning
guestrooms

XYMAX
careSS Hokkaido

×

Linen
supplyCleaning
guestrooms
XYMAX
SALA Hokkaido

Maximize hotel sales by achieving high occupancy and high quality through the internalization ofguest room supply-related businesses.
Xymax careSS Hokkaido
6Hotel market in Sapporo
 The number of guests decreased significantly due to the impact of COVID-19 but has been on the rise since 2021. In 2022, the number of foreign overnight stays increased as bordermeasures were lifted, and by 2023, the number had recovered to 23.7% of the total. In addition, the summer season in Sapporo is popular as a summer resort, with the largest number ofguests staying in August. The winter season is slow except for the Snow Festival season. However, due to the growth of the inbound tour, it has recently recovered to the pre-COVID-19
level, and growth can be expected in the future.

┃ Changes in the total number of guest nights in Sapporo┃
12000
Foreigners┃ Changes in the total number of guest nights in Sapporo (by month)┃
1,000

Domestic

From 2017 to 2019

2021

2022

2023

2024

3-year average:

800

9000

600
6000

400
200

3000

(Thousands)(Thousand people)

0
Apr May Jun

0

Jul Aug Sep Oct Nov Dec JanFeb Mar2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 (fiscal year)
Source: Japan Tourism Agency, Survey of Visitors' Travel

Source: Japan Tourism Agency, Survey of Visitors' Travel The number of passengers (domestic flights) at New Chitose Airport will fully recover from 2022, reaching the┃Changes in the number of passengers at New Chitose Airport┃
level before the COVID-19 in 2023. The number of passengers (international flights) will resume from theInternational
Domestic
summer of 2022, and a recovery trend is expected.
30000
Growth is expected in 2024 due to resumption of service with multiple cities and new service.
 According to the facility development plan, over the next 30 years from 2017, 295 billion yen will be invested infacilities to improve the airline network and the environment for receiving airlines, and it is expected that this willlead to an increase in the incoming flow of passengers.
20000┃ Flight Routes from New Chitose Airport ┃RouteNew and resumed

Jul 2024

Eastar Jet

Sapporo-Seoul(Thousandpeople)

0(Years)
New and resumed

End of 2024

Really Cool Airlines

Sapporo-Bangkok

Source: Ministry of Land, Infrastructure, Transport and Tourism “Airport ManagementStatus”, New Chitose Airport HP (August 2024)

Source: New Chitose Airport HP (August 2024)

2049Sapporo-Bangkok

2024

Sapporo to Taipei

Thai Airways International

2023

China Airlines

May. 2024

2022

Jan 2024

New and resumed

2021

New and resumed

10000

2020

Sapporo-Shenzhen

2019

Sapporo-Seoul

Shenzhen Airlines

2018

Korean AirJan 20242017

Jan 2024

2016

Increase in flights
New and resumed

2015

Airline2014

Month of service andresumption

2013

New and resumed

Source: Compiled from “Airport Management Status” by the Ministry of Land,
Infrastructure, Transport and Tourism and “Master Plan” by Hokkaido Airports Co., Ltd.

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NotesUnless otherwise noted, the figures in this document are rounded down to the nearest displayed unit, and percentages are rounded to the nearest displayed unit. Therefore, the totals for each
item may not match.
P.3(Note 1) The “effect of the Transfer” is the amount obtained by subtracting the amount after deducting various expenses associated with the transfer from Transfer price of the Asset to betransferred and dividing the result by total number of investment units issued and outstanding at the end of the period (forecast): 249,650 units.
(Note 2) “Earnings from Asset to be transferred during the period” refers to the amount of projected earnings for the period from the scheduled Transfer date (September 3, 2024) to the endof the 14th fiscal period (February 28, 2025).
(Note 3) "Earnings from Asset to be acquired during the period" refers to the amount of expected revenue for the period from the scheduled acquisition date (September 6, 2024) to the end of
the 14th fiscal period (February 28, 2025).
(Note 4) “Existing properties revenue” refers to the revenue from existing properties excluding the assets to be transferred, which was expected at the time of the announcement of thefinancial results for the 12th fiscal period (ended February 2024), and which has changed as per the assumptions in the “Notice of Revision of Investment Forecast and Distribution
Forecast for the fiscal period ending February 2025 (14th Fiscal Period)” disclosed today.
(Note 5) “One-time cost at time of acquisition” refers to various costs associated with the acquisition of the Asset to be acquired.

8