[For Information Purpose Only]
December 22, 2016
To All Concerned Parties
Name of REIT Issuer:
Invincible Investment Corporation
Name of representative:
Naoki Fukuda, Executive Director
Roppongi Hills Mori Tower
6-10-1 Roppongi, Minato-ku, Tokyo, Japan(Securities code: 8963)
Asset manager:
Consonant Investment Management Co., Ltd.
Naoki Fukuda, CEOContact: Jun Komo
General Manager of Planning Department(Tel. +81-3-5411-2731)

Notice Concerning Amendment to Memorandum of Understanding on Preferential
Negotiation Rights
Invincible Investment Corporation (“INV”) decided today to amend (the “Amendment”) theMemorandum of Understanding on Preferential Negotiation Rights (the “MOU”) which wasentered into by INV and affiliates of its Sponsor, Fortress Investment Group LLC on May 21,
2014 and last amended on March 10, 2016.
1. Reasons for the Amendment
INV has added two large-size Tokyo centric high quality residential properties to its pipeline on
the back of the continued success of the rent increase program initiated in early 2014 for its
residential assets.
As announced in today’s release “Notice concerning Revision of Forecast of Financial Resultsand Distribution for the 27th Fiscal Period Ending December 2016, together with Forecast ofFinancial Results and Distribution for the 28th Fiscal Period Ending June 2017 and 29th FiscalPeriod Ending December 2017,” INV’s residential portfolio continues to perform well with
95.6% occupancy across all 68 residential properties as of the end of November 2016. Therent increase program continues to maintain progress as rents, compared with immediately
preceding leases, increased at 54.6% of new leases for an average increase of 1.5% across all
new leases, and increased at 30.5% of renewal leases for an average increase of 0.9% acrossall renewal leases while the retention rate for existing tenants was 84.1% from July toNovember 2016. In total, all leases increased by 1.2% from July to November 2016. The rent
increase program from January to November 2016 period is shown in Appendix 1. The
residential portfolio NOI is forecast to increase by 2.2% for the December 2016 period and3.6% for the full year 2016 year-on-year, as shown in Appendix 2.

This English language notice is a translation of the Japanese-language notice released on December 22, 2016 and was prepared solely for the convenience of, andreference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions basedon their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In theevent of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

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The two residential assets are among the highest quality assets in the Minami-Senju area.
Royal Parks Tower Minami-Senju is a 39 floor tower with 557 units built in 2008 developed by
Daiwa House as part of the Minami-Senju master development project. Royal Parks Seasir
Minami-Senju was built in 2006 with 113 units, a high quality asset that is master-leased by
Daiwa Living, a subsidiary of Daiwa House.
After the Amendment, the MOU will have 22 hotels (6,116 rooms) and 11 residential properties(1,413 units), which will continue to provide INV with considerable opportunity for externalgrowth.

This English language notice is a translation of the Japanese-language notice released on December 22, 2016 and was prepared solely for the convenience of, andreference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions basedon their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In theevent of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

22. Newly Added Properties(1) Royal Parks Tower Minami-Senju

Address
AccessCompletion Date
# of Units
Rentable Area
Land Area

Minami-Senju 4-chome, Arakawa-ku, Tokyo
5 minute walk from Minami-Senju Station(Tokyo Metro Hibiya Line, JR Joban Line, Tsukuba
Express Line)May 2008
557 (Apartments 555, Nursing home 1, Shop 1)1
39,113.46m2
8,738.44m2(Note 1) The nursing home and the shop are counted as 1 unit for the counting of the number of units.

This English language notice is a translation of the Japanese-language notice released on December 22, 2016 and was prepared solely for the convenience of, andreference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions basedon their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In theevent of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

3(2) Royal Parks Seasir Minami-Senju

Address
AccessCompletion Date
# of Units
Rentable Area
Land Area

Minami-Senju 3-chome, Arakawa-ku, Tokyo
10 minute walk from Minami-Senju Station(Tokyo Metro Hibiya Line, JR Joban Line, Tsukuba
Express Line)
August 2006
113
6,496.86m2
3,570.00m2

This English language notice is a translation of the Japanese-language notice released on December 22, 2016 and was prepared solely for the convenience of, andreference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions basedon their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In theevent of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

43. Properties Covered by the MOU after the Amendment(1) Hotel Properties

No.

1
2

Property Name

Hotel MyStays Premier
Akasaka
Hotel MyStays Yokohama
Kannai

StatusRenovation/Construction
Completion(Expected)

Location

Type# ofRooms

Minato-ku, Tokyo

Limited327

In Operation

Jul 2016

Yokohama, Kanagawa

Limited166

In Operation

Oct 2016

13

RIHGA Royal Hotel Kyoto

Kyoto, Kyoto

Full489

In Operation

Sep 2016

4

Narita Excel Hotel Tokyu

Narita, Chiba

Full706

In Operation－Sapporo, Hokkaido

Full418

In Operation

Jul 2015

Sapporo, Hokkaido

Limited242

In Operation－56

Hotel MyStays Premier
Sapporo Park
Hotel MyStays Sapporo
Station7

Hotel MyStays Oita

Oita, Oita

Limited145

In Operation－8

Art Hotel Hirosaki City

Hirosaki, Aomori

Full

134

In Operation－9Beppu Kamenoi Hotel

Beppu, Oita

Resort322

In Operation

Oct 2015

Fusaki Resort Village

Ishigaki, Okinawa

Resort195

In Operation

Jun 2015

Urayasu, Chiba

Full1,016

In Operation

Dec 2016

Osaka, Osaka

Limited397

In Operation

Jun 2016

101112

Sheraton Grande Tokyo BayHotel
Hotel MyStays Shin Osaka
Conference Center

13

Art Hotel Asahikawa

Asahikawa, Hokkaido

Full

265

In Operation－14

Hotel MyStays Kanazawa
CastleKanazawa, Ishikawa

Limited206

In Operation

Mar 2016

15

Hotel JAL City Matsuyama

Matsuyama, Ehime

Full

161

In Operation－16

Hotel MyStays Ueno East

Taito-ku, Tokyo

Limited150

In Operation

Mar 2016

Osaka, Osaka

Limited120

Under
Construction2

Nov 2017

Sapporo, Hokkaido

Limited86

In Operation

May 2016

Yokohama, Kanagawa

Limited70

In Operation

Sep 2016

Taito-ku, Tokyo

Limited161

In Operation

Jun 2016

Minato-ku, Tokyo

Limited120

In Operation

Nov 2016

Shinagawa-ku, Tokyo

Limited220

In Operation

Nov 2016

171819202122(tentative) Hotel MyStays
Honmachi 3-chome
Hotel MyStays Sapporo
Nakajima Park
Flexstay Inn Sakuragicho
MyCUBE by MYSTAYS
Asakusa Kuramae
Hotel MyStays Premier
Hamamatsucho
Hotel MyStays Premier
Omori

This English language notice is a translation of the Japanese-language notice released on December 22, 2016 and was prepared solely for the convenience of, andreference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions basedon their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In theevent of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

5(2) Residential Properties
No.

Property Name

Location# of Apartment Units

1Gran Charm Hiroo

Shibuya-ku, Tokyo121

2Plestay Win Kinshicho

Sumida-ku, Tokyo

92

3

Gran Charm Kichijoji

Musashino, Tokyo

28

4Green Patio Noda

Noda, Chiba

240

5Dainichi F-45

Urayasu, Chiba

54

6Gran Charm Urayasu

Urayasu, Chiba

54

7Gran Charm Urayasu 5Urayasu, Chiba

54

8Gran Charm Minami Gyotoku IIchikawa, Chiba

52

9Gran Charm Minami Gyotoku IIIchikawa, Chiba

48

Arakawa-ku, Tokyo

557

Arakawa-ku, Tokyo113

1011(Note 1)

Royal Parks Tower Minami-Senju(New)Royal Parks Seasir Minami-Senju(New)“Limited” refers to “Limited Service Hotel”, a hotel focusing on revenues from room stay and offer limited
service regarding foods and beverages, banquet, spa or gymnasium facilities.
“Full” refers to “Full Service Hotel,” a hotel having sections of stay, foods and beverages, and banquet.
“Resort” refers to “Resort Hotel,” a hotel located at tourist destinations or recreational lots, having
sections of stay, foods and beverages, and incidental facilities.

(Note 2)(tentative) Hotel MyStays Honmachi 3-chome (Osaka) is scheduled to be completed in November 2017,and is scheduled to open in December 2017.

(Note 3)

The term of validity of the MOU is from December 22, 2016, the date of amendment to the MOU, toDecember 21, 2017. Regarding the 33 properties listed above, there is no guarantee that INV will begranted an opportunity for considering acquisition of the properties or be able to acquire the properties.

4. Future Outlook
The Amendment is expected to have no impact on INV’s financial forecasts for the fiscal period
ending December 2016 (July 1, 2016 to December 31, 2016). Therefore, financial forecasts
remain unchanged.
Website of INV: http://www.invincible-inv.co.jp/eng

This English language notice is a translation of the Japanese-language notice released on December 22, 2016 and was prepared solely for the convenience of, andreference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions basedon their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In theevent of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

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(Appendix 1)<Residential Rent Increase Initiative>
Change in Rent for New Contracts1
Increase

FlatDecrease

Change in Rent for Renewal Contracts1
Occupancy

Increase
100%

100%

95.5%
80%

94.0%

94.7%

95.1%

22.3%

19.7%

24.9%

60%

Flat

Decrease

Renewal Rate 2

84.7%

85.4%

83.8%

61.8%

60.9%

61.5%

38.1%

39.1%

38.4%

0.1%
20132014

2015

2016
Jan‐Nov818

872

1,209

1,054

81.2%
80%
60%

27.8%
40%40%
20%

57.2%

56.8%

50.9%

2013

2014

2015

2016
Jan‐Nov

827

649

943

746

1.15

1.01

1.23

1.13

36.4%

20%
0%

0%

No. of
New Contracts
Net Leasing Cost(# of months)3

99.3%

No. ofRenewals

Change in Rent for All Contracts1
Increase
100%

18.3%

8.8%

Flat

Average Rent Increase/Decrease4

Decrease

10.3%

10.1%

80%

45.0%

42.8%

60%

46.3%

2.5%

New Lease

2.0%

1.9%

Renewal

Total

1.6%

1.5%

1.3%
1.1%

1.3% 1.2%

1.2% 1.2% 1.2%

1.0%

63.3%
40%

0.5%

46.2%

20%

46.9%43.6%

18.4%

0.0%
‐0.5%0%

2013

2014

2015

‐0.3%

0.0%
-0.1%

2013

2016
Jan‐Nov2014

2015

2016
Jan‐Nov(Note 1) Based on the properties owned at the end of period. 63 properties for 2013 and 2014, 66
properties for 2015, and 68 properties for June 2016
(Note 2) Renewal rate is calculated by “Number of Renewals during the Period” ÷”Number of Cases
Targeted for Renewal during the Period”(Note 3) Net Leasing Cost (Multiple of Monthly Rent) = Advertising Expenses (Multiple of Monthly Rent)+ Free Rent (Multiple of Monthly Rent) – Key Money (Multiple of Monthly Rent)(Note 4) Monthly rent increase (%) of new or renewed contracts compared with previous contracts ofexisting properties.

This English language notice is a translation of the Japanese-language notice released on December 22, 2016 and was prepared solely for the convenience of, andreference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions basedon their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In theevent of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

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(Appendix 2)<Internal Growth in Residential Portfolio>
NOI1,2
1H (Jan‐Jun)(JPY million)

Occupancy and Average Rent per Tsubo1
Average Rent per Tsubo 4 (Left)(JPY)

2H (Jul‐Dec)

Occupancy 5 (Right)

10,200

120%

3,500

3,000

2,982

‐0.7%

2,962

+3.6%

10,085

3,069

2,500

1,473

1,496

+2.2%

1,528

110%

+1.5%

10,000

9,917

+0.2%

9,935
100%

2,000
9,800

94.0%

94.5%

95.0%

1,500

90%

1,000

+5.1%

9,600

1,509

1,466

1,540

2014

2015

2016

80%

500

9,4000

0

070%

2014

2015

2016

(Note 1) Based on the 63 properties owned as of the end of 2014
(Note 2) Excludes one-off insurance-related revenues and expenses(Note 3) Average Rent per Tsubo is calculated by dividing the total rental revenue including common
area charges for each month by the sum of total leasable area at the end of each month.
(Note 4) Occupancy is calculated by dividing the sum of total leased area by the sum of total leasablearea at the end of each month.

This English language notice is a translation of the Japanese-language notice released on December 22, 2016 and was prepared solely for the convenience of, andreference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions basedon their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In theevent of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

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