Ichigo Hotel (3463)

Ichigo Hotel July 2019 Fiscal Period
Corporate Presentation
September 12, 2019

Ichigo Hotel REIT Investment Corporation (3463)
Ichigo Investment Advisors Co., Ltd.

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

www.ichigo-hotel.co.jp/english

Make The World
More Sustainable© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

July 2019 Results July 2019 Highlights
 July 2019 Earnings Breakdown Ichigo Hotel Operating Results
 RevPAR Up in Kyushu, Hokkaido, andChugoku/Shikoku
 Actions to Grow Earnings
 Value-Add Capex: Nest Hotel Naha Value-Add Capex: Court Hotel Kurashiki Acquisitions Increasing Geographic
Diversification

Ongoing Earnings Growth Ongoing Actions to Drive Increased
Shareholder Value Operator Changes to Generate Higher
Earnings
 Acquisitions and Sale Accretive toShareholders Portfolio Growth Opportunity via Ichigo
Sponsor Support

January 2020 and July 2020 Forecasts
 January 2020 Forecast
 July 2020 Forecast

Ichigo’s Commitment to ESG Ichigo Sustainability Policy
 Ichigo ESG – Environmental
 Ichigo ESG – Social
 Ichigo ESG – GovernanceAppendices Hotel Market Environment Portfolio Details
 Loan Details & Shareholder Composition Growth Roadmap, Sponsor, Shareholder
Alignment© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

5

July 2019 Results© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

6

July 2019 Highlights
Results
Net Income

JPY 804M

Acquisitions

2 Hotels (Kumamoto & Hiroshima)

RevPAR

JPY 7,773 (13 variable rent hotels)-JPY 50M (-5.9%) YOY(Acquisition Price: JPY 3.72B)-JPY 449 (-5.5%) YOY

Details• Hit by new hotel supply in Kyoto and Osaka, whichpeaked out in 2019 and is now decreasing• Drive further earnings growth and geographic
diversification via acquisition of hotels in Kumamoto andHiroshima• RevPAR down in Osaka, Kyoto, and Okinawa, up in
Kyushu, Hokkaido, and Chugoku/Shikoku

NOI

JPY 1.61B-JPY 28M (-1.8%) YOY• NOI gain on hotel acquisition (+JPY 68M) offset by
decline (-JPY 106M) in Kyoto/Osaka

FFO

JPY 4,496• FFO down on lower NOI

Dividend

JPY 3,154• -JPY 20 (-0.6%) vs. forecast

NAV

JPY 146,580-JPY 175 (-3.7%) YOY-JPY 198 (-5.9%) YOY+JPY 854 (+0.6%) vs. previous period• Unrealized gains up on new assets acquired at below
appraisal value

FFO (Funds from Operations) = (Net Income + Depreciation + Amortization of Expenses Related to REIT Establishment + Amortization of Share Issuance Expenses+ Loss on Disposal of Fixed Assets + Accrued Asset Disposal Costs +/- Losses/Gains on Sales +/- Extraordinary Losses/Gains) / Number of Shares Outstanding
NAV = BPS + Unrealized Capital Gains per Share© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

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July 2019 Earnings Breakdown(JPY million)
Jul 2018
ActualJul 2019
Actual (A)Forecast (B)(Mar 2019)

vs. Forecast(A) - (B)

Major Variation Factors (vs. Forecast)

Operating Revenue

1,814

1,789

1,785

+4

Variable Rent

803

735

750

-14

Fixed Rent

952

984

969

+14

Other

58

70

65

+4

771

797

796

+1

Repair & Maintenance

20

18

22

-3

Depreciation

310

328

317

+11

Operating Profit

1,042

992

989

+2

Recurring Profit

855

805

810

-5

Net Income

854

804

809

-5

Dividend

JPY 3,352

JPY 3,154

JPY 3,174-JPY 20FFO

JPY 4,671

JPY 4,496

JPY 4,473+JPY 23

NOI

1,640

1,611

1,606

+5

Post-Depreciation NOI

1,329

1,283

1,288

-5

246

256

319

-63

51,44854,984––

Operating Expenses

Capex
Book Value© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Above forecast: 3 hotels; Below forecast: 7 hotels
Increase in variable rent due to acquisition of Nest
Hotel Kumamoto +24
Increase in fixed rent due to acquisition of Nest Hotel
Kumamoto +13

Effective cost controls
Increase due to acquisition of Nest Hotel Kumamoto+12

Borrowing-related expenses on acquisitions(Kumamoto, Hiroshima) +8-0.6% vs. forecast-5.9% (-JPY 198) YOY

Effective cost controls

8Ichigo Hotel Operating Results
Variable Rent Hotels (13 Hotels)
Feb 1, 2018
– Jul 31, 2018

Feb 1, 2019
– Jul 31, 2019

Difference

YOY

Room Revenue (JPY M)

3,042

2,885

-157

-5.2%

Revenue (JPY M)

3,517

3,349

-167

-4.8%

RevPAR (JPY)

8,221

7,773

-449

-5.5%

Occupancy

92.6%

89.7%

-2.9%

-3.2%

ADR (JPY)

8,879

8,668

-212

-2.4%

Total Portfolio (20 Hotels)
Feb 1, 2018
– Jul 31, 2018

Feb 1, 2019
– Jul 31, 2019

Difference

YOY

Room Revenue (JPY M)

4,361

4,225

-135

-3.1%

Revenue (JPY M)

4,906

4,727

-178

-3.6%

RevPAR (JPY)

7,426

7,182

-245

-3.3%

Occupancy

89.9%

88.4%

-1.5%

-1.7%

ADR (JPY)

8,260

8,122

-137

-1.7%

* Excludes Hotel Wing International Kobe Shin Nagata Ekimae and Grandpark-Inn Yokohama. Operating results before acquisition are based on data
provided by previous owner.

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

9

RevPAR Up in Kyushu, Hokkaido, and Chugoku/Shikoku
19 Hotels (excludes Grandpark-Inn Yokohama, Hotel Wing
International Kobe Shin Nagata Ekimae, Nest Hotel Kumamoto,and Valie Hotel Hiroshima)

YOY by Region (Feb 2019 – July 2019)
RevPAR

Occupancy

Total Portfolio

Hokkaido

+4%

+3%

ADR

Tokyo

Kyoto

Osaka

Chugoku/
Shikoku

+5%

+4%

+2%

+1% +1%

+1%

0%
-3%

Tokai/
Chubu

+1%

0%
-2%

Kyushu+6%

Okinawa

+5%

+1%

0%

0%

0%
-2%
-5%
-6%

-7%

-16% -14%
-14%

-19%

(JPY)

RevPAR

9,449

8,204

6,406

8,796

6,901

6,254

9,906

8,348

No. Hotels

3

2

4

2

2

4

1

1

% of Total Portfolio
Rental Income

15%

8%

17%

10%

14%

17%

4%

7%

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

10

Actions to Grow Earnings
Following Actions Forecast to Increase NOI by JPY 23.8M p.a. (+1.9%*)–

Value-Add Capex: NOI +JPY 11.3M p.a.
 Nest Hotel Naha, Court Hotel Kurashiki (details on pp. 12-13)–

Hotel Operator Contract Renewals: NOI +JPY 11.1M p.a.
 Higher minimum rent guarantees at 4 hotels (Nest Hotel Sapporo Odori, Nest Hotel Osaka
Shinsaibashi, Nest Hotel Matsuyama, Nest Hotel Naha)–

Cost Efficiencies: NOI +JPY 1.4M p.a.
 Reduced public utility water consumption using local well water (Valie Hotel Tenjin)* Increase in NOI (Jan 2019 + July 2019 fiscal periods) at above hotels© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

11

Value-Add Capex: Nest Hotel Naha
Increased guest capacity to capture leisure demand− Converted 2 low-use Japanese tatami mat rooms into 4 Western triple rooms
Forecast
Economics

Total Capex

Earnings Increase

ROI

JPY 22.0M+JPY 3.7M p.a.

16.9%

BeforeCompleted in July 2019

After
 Converted into triple rooms with guest capacity of 3
 Removed desk for a more spacious and optimized layout
for leisure guests

Split

Japanese tatami mat room (44m2)© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

12

Value-Add Capex: Court Hotel Kurashiki
Increased guest capacity to capture leisure demand− Converted 3 suites into 6 double rooms
Forecast
Economics

Total Capex

Earnings Increase

ROI

JPY 39.0M+JPY 7.6M p.a.

19.5%

BeforeCompleted in July 2019

After
 Converted into 6 double rooms to capture bothbusiness and leisure demand Newly refurbished with a classical design to matchthe ambience of the hotel

Split

Suite (44m2)© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

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Acquisitions Increasing Geographic Diversification
Nest Hotel Kumamoto

Valie Hotel Hiroshima

Acquisition Date

April 25, 2019

July 19, 2019

Area

Kumamoto City

Hiroshima City

Acquisition Price

JPY 2.22B

JPY 1.50B

Appraisal Value

JPY 2.44B

JPY 1.73B

NOI Yield1

6.8%

7.1%

Location

2-min walk from Nishikarashimacho Stationon the Kumamoto City Tram Line

15-min walk from Hiroshima Station on the
JR Line and 3-min walk from the Jogakuinmae Station on the Hiroden Tram Line

SellerIchigo (Sponsor)

Japanese Third Party

Hotel

1NOI Yield = Appraisal-based NOI÷ Acquisition Price

Scheduled to rebrand and re-open as Valie Hotel Hiroshima by Sep 2019-end© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

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Ongoing Earnings Growth© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

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Ongoing Actions to Drive Increased Shareholder Value
Dividend Growth and Highly Secure Earnings Provide Strong Foundation
for Further Growth in Shareholder Value
Drive Further Dividend Growth
Organic Growth

Acquisition-Led Growth• Proactively execute value-add capex• Dispose of hotels with limited growth potential• Increase earnings by revising fixed rent andvariable rent terms at timings of rent renewals• Grow with sponsor support– Acquire assets without having to participate
in competitive auctions• Recycle capital– Deploy proceeds from sales into higherreturn acquisitions• Use low-cost borrowing capacity– Increase capital– Manage interest rate risk (extend loan
maturities and fix interest rates)

Highly Secure Earnings Base• Grow portfolio of stay-only hotels, a hotel type having stable revenue• High underlying land values reflect high location attractiveness and value• Focus on major regional cities with convenient public transportation access and revenue upsidefrom local events further reinforces earnings stability• Geographic diversification and centrally-located hotels with stable demand support high earnings
stability

Portfolio Growth & Diversification Drive Earnings Growth & Stability© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

16

Operator Changes to Generate Higher Earnings (1)Hotel Wing International Kobe Shin Nagata Ekimae− Completed full renovation and re-opened on June 1 under new Hotel Wing International
brand− Brought in new operator with no contract downtime− New operator contract increases fixed rent and newly adds variable rent
Exterior© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Interior

17

Operator Changes to Generate Higher Earnings (2)Valie Hotel Hiroshima− Started full-renovation upon acquisition in July 2019. Scheduled to re-open
under new brand in September (de minimis downtime)− Variable-rent lease will allow Ichigo Hotel to benefit from earnings growth on
increased inbound tourism
Inbound Tourism Increase in Hiroshima (unit: million people)
Tourists Visiting Hiroshima (Left Axis)

After

Inbound Tourists (Right Axis)
2.0

15.0
11.7

12.0

12.6

13.4

13.4
1.8

1.5

10.0
1.2

1.0

1.0
5.0
0.7

0.0

0.0
2014

2015

2016

2017

2018

* Calculated by Ichigo Investment Advisors based on Hiroshima City “2018 Survey of Travelers to Hiroshima City”© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

18

Acquisitions and Sale Accretive to Shareholders
Sold Hotel Vista Premio Kyoto (Announced on August 27, 2019）− Proceeds will be used to fund future asset acquisitions and value-add capex
Acquisitions & Sale Portfolio Outcome
Generated Gains on Sale Significantly Higher than Appraisal-Based Unrealized Gains Sold for JPY 4.5B (1.2X appraisal value of JPY 3.82B)
 Will distribute 100% of the gains on sale (c. JPY 668M) as a dividend to shareholders

Geographic Diversification(Acquisition-price basis)

Before (Jan 31, 2019)
Kobe

Yokohama
2.9%
2.9%

Kyushu2.7%

Nagoya5.3%
Okinawa
7.4%

Osaka
18.2%

Hokkaido
7.7%
Tokyo
10.4%

NOI Growth
NOI of Sold Hotel
Hotel Vista Premio Kyoto

Kyoto
15.9%

Chugoku/
Shikoku
12.5%

After (October 31,2019)

Nagoya5.2%

Osaka + Kyoto = 34.1%

JPY 167M p.a.

Sold

Nest Hotel
Kumamoto

Hotel Vista
Premio Kyoto

Yokohama Kobe
2.9%
2.9%

Kyushu
7.1%

Osaka
18.1%

Okinawa
7.4%

Kyoto
8.8%

Hokkaido
7.7%
Tokyo
10.4%

Tokai
14.1%

Acquired

Tokai
14.1%

Chugoku/
Shikoku
15.4%

Osaka + Kyoto = 26.9%

Valie Hotel
Hiroshima

NOI of Acquired Hotels
Nest Hotel Kumamoto + Valie Hotel Hiroshima

JPY 256M p.a.

NOI of To be Sold Hotel: Appraisal NOI as on July 31, 2019; NOI of Acquired Hotels: Total of Appraisal NOI as of the acquisition date

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

19

Portfolio Growth Opportunity via Ichigo Sponsor Support
18 Hotels (JPY 55B) in Ichigo Sponsor Pipeline as of July 31, 2019
− Stay-only hotels across Japan− Locations: Major cities such as Tokyo, Yokohama, Osaka, Kyoto andFukuoka

Yokohama

Fukuoka© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Fukuoka

Shinjuku

Osaka

20

January 2020 and July 2020 Forecasts© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

21

January 2020 Forecast
Dividend +49.3% vs. Previous Forecast(JPY million)
Jan 2020
Previous Forecast(Mar 2019)

Jan 2019
Actual (A)Jan 2020
Revised
Forecast (B)Major Factors for Variation(B) - (A)Operating Revenue

2,439

1,773

2,383

-56

Variable Rent

701

713

665

-35

Expected RevPAR at Variable Rent Hotels: JPY 7,090 (-7.9% YOY)

Fixed Rent

984

991

989

+5

Increase due to acquisitions & sale: +5, Increase in rent from revised lease
contract (Sapporo Odori, Osaka Shinsaibashi, Naha, Matsuyama): +5
Decrease due to revised lease contract (Kobe): -6

Other

753

68

727

-25

Decrease due to acquisitions & sale: -7, Increase due to revised lease contract(Kobe): +7, Decrease in gains on sale: -26

866

793

980

+114

Repair & Maintenance

16

23

27

+10

Depreciation

308

322

354

+46

Operating Profit

1,573

979

1,402

-170

Recurring Profit

1,399

803

1,199

-200

Net Income

1,398

802

1,198

-200

Dividend

JPY 5,487

JPY 3,147

JPY 4,700-JPY 787

FFO

JPY 4,055

JPY 4,432

JPY 3,494-JPY 561

NOI

1,574

1,592

1,538

-35

Post-Depreciation NOI

1,266

1,270

1,183

-82

321

317

363

+42

Operating Expenses

Capex

Increase in asset-related expenses due to acquisitions & sale: +28,
Increase in AM fee: +32, Increase in exemption of consumption tax: +21

Increase in borrowing-related expenses on acquisitions: +31+49.3% (+JPY 1,553) vs. previous forecast-14.3% YOY© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

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July 2020 Forecast
Dividend -4.9% YOY(JPY million)
Jul 2019
Actual (A)Jul 2020
Forecast (B)Major Factors for Variation(B) - (A)Operating Revenue

1,789

1,789

–

Variable Rent

735

809

+73

Expected RevPAR at Variable Rent Hotels: JPY 7,612 (-0.6% YOY)
Increase due to acquisition: +72

Fixed Rent

984

936

-47

Decrease due to acquisitions & sale: -46

Other

70

43

-26

Decrease due to acquisitions & sale: -27

797

816

+19

Increase due to acquisitions & sale: +7,
Increase in depreciation of existing hotels: +17, Decrease in AM fee: -10

Repair & Maintenance

18

19

–

Depreciation

328

362

+33

Operating Profit

992

972

-19

Recurring Profit

805

766

-38

Net Income

804

765

-39

Dividend

JPY 3,154

JPY 3,001-JPY 153

FFO

JPY 4,496

JPY 4,441-JPY 55

NOI

1,611

1,620

+8

Post-Depreciation NOI

1,283

1,257

-25

256

352

+96

Operating Expenses

Capex

Increase in borrowing-related expenses on acquisitions: +24-4.9% YOY

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

23

Ichigo’s Commitment to ESG© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

24

Ichigo Sustainability Policy
Harmony with the Environment
Ichigo actively monitors and minimizes the environmental impact of its business operations.

Energy Conservation, CO2 Reduction, and Recycling
Ichigo seeks to contribute to a low-carbon, low-waste society by reducing energy
consumption, extending the useful life of assets, actively recycling, reducing waste
production and water consumption, and implementing green procurement measures.

Regulatory and Environmental Compliance
Ichigo complies with all environmental laws and regulations and Ichigo’s own independentlyestablished environmental rules. Ichigo also carefully monitors and complies with all applicablechanges in laws and regulations.

Training and AwarenessIchigo promotes understanding of its Sustainability Policy and works to increase sustainability
awareness among all Ichigo employees.

Sustainability Performance Communication and Disclosure
Ichigo communicates its Sustainability Policy and Ichigo’s sustainability initiatives to society atlarge. Ichigo also obtains certifications for its sustainability activities on an ongoing basis.

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

25

Ichigo ESG – Environmental
Sustainable Real Estate
Preserve & Enhance Existing Buildings
to End Wasteful Demolish & Rebuild

Solar and Wind Energy: Safe and Clean
Annual CO2 Reduction
93,521,697 kg

Annual Power Generation
141,699,548 kWh‒ Lengthen useful life of real estate‒ Shrink footprint by reducing demolition
waste and use of raw materials, energy,
and human effort for construction

DemolishLowestImpactHighestEfficiency

Equivalent to annual
CO2 emission of
40,661 cars

Equivalent to annual
energy consumption of
47,233 households
The Federation of Electric Power
Companies of Japan
Annual energy consumption per household
3,000kWh

Ministry of Environment
Annual CO2 emission per car c. 2,300kg(July 2018 to June 2019 – Total of Ichigo
and Ichigo Green)

Disaster Recovery & Response

Environmental Certifications

No injuries or damages at any Ichigo asset or power
plant from 2018 natural disasters

Ichigo Office (8975)

Robust Assets- Power plants: site selection and construction based on
detailed specifications customized to local geography- Real estate: continuous improvements to safety & functionality
via value-add capex

Rank S

Robust BCP & Realtime Response- Pre-typhoon preventative measures (water shielding,sandbags, etc.) & on-site checks- Overwhelming priority is safety of tenants: on-the-groundconfirmation & on-the-ground response- Ichigo engineering team immediate response: same day onsite safety and engineering inspections to prevent secondary
damage and losses

CASBEE

IchigoTakamatsu
Building

IchigoMarunouchi
Building

Rank A

Ebisu
Green
Glass

IchigoSakaisuji
Honmachi
Building

Ichigo Sendai
East Building

Green Star(Highest Ranking)3 years in a row

Other Certifications:
BELS, DBJ Green Building Certification© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

26

Ichigo ESG – Social
Sports & Arts
Supporting Outstanding,World-Class Athletes‒ Weightlifting‒ Riflery‒ Track & Field

Paralym Art Sponsor‒ Support artists withdisabilities

Weightlifting Athlete
Hiromi Miyake

Children’s Cancer Treatment
Supporting University of Miyazaki
Faculty of Medicine’s Program forChildren with Cancer‒ Issued CSR bond & donated a portion ofunderwriter commission to the Cancer
Program‒ Sponsoring volunteer activities in supportof children with cancer

Local Communities
Promoting Community Development as J.League
Top Partner

Strengthen Local Communities, Create Jobs,
and Boost Rural Economies via Smart Agriculture‒ Renovate and upgrade stadiums and help local governments
reduce steep operating and maintenance costs‒ Collaborate with local farmers to increase agricultural
output, improve quality, and raise rural incomes‒ Use real estate expertise to help build stronger and healthierlocal communities‒ Increase Japan’s food self-sufficiency©J.LEAGUE© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

27

Ichigo ESG – GovernanceFirst J-REIT No Fixed Fee, Performance Fee-Only Structure Performance-linked fee structure to support shareholder value creation
 Pro-active, dynamic management of Ichigo Hotel assets on behalf ofshareholders

Best Practice Governance
REIT

Asset Management Company (AMC)

Monitors Asset Management Company• All Ichigo Hotel Directors are Independent
Directors• Active dialogue and effective internal controls via
Board discussions led by REIT Executive Director• Draw upon expertise of REIT Supervisory Directors(qualified lawyers & accountants)

Best Practice
Majority of AMC Directors (3 of 5) are Independent
Directors
Independent asset management team & bestpractice execution on behalf of Ichigo Hotel within
AMC
Compliance and Audit are directly under the AMC
President to monitor and review critical compliancematters
Ensure objectivity by including third-party,
independent lawyers and accountants in theInvestment Committee & Risk & Compliance
Committee••••

Ichigo Hotel (3463) and Ichigo Office (8975) are the only J-REITs (out of 63)
that both have an Asset Management Company (AMC) board that has a majority of Independent
Directors and whose AMC President does NOT serve as the Executive Director of the REIT
Independence of the Investment Corporation from AMC

Independent Directors at AMC➡ 31 of 63 J-REITs have AMC Presidents serving as➡ Only 3 Asset Management Companies have any

Executive Director of the REIT

All Ichigo Hotel Directors are Independent

Independent Directors

3 of 5 Ichigo Investment Advisors' Directors
are Independent© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

28

Appendix: Hotel Market Environment© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

29

Growth Driver: Strong Inbound Demand− New hotel supply forecast to peak in 2019
− Domestic demand firm while inbound demand continues to growTotal Number of Tourists in Domestic Lodging Facilities

Growth in New Hotel Supply By Major City vs. 2017

(million persons)
20.0%

600
Tokyo

Osaka

SapporoNagoyaKyoto

FukuokaDomestic
Inbound

Naha

500
400

360
24

339

15.0%

396

419

417

432

433

382
31

42

61

64

73

79

351

354

359

353

359

354

17

300
200

336

322
100

10.0%

0
2011
2012
2013
2014
2015
2016
2017
2018
*Calculated by Ichigo Investment Advisors based on Japan Tourism Agency (JTA) “Statistical Survey of Travelers”

Number of Inbound Tourists
60

5.0%

60
■ Government Target

40

40
28

+402%

24

0.0%
2018

2019

2020

2021

2022

2023

31

20

20
6

8

10

13

0
2011

2012

2013

2014

2015

2016

2017

2018

2020

2030

*Calculated by Ichigo Investment Advisors based on Japan National Tourism Organization (JNTO)’s“Visitor Trends” and Prime Minister’s Office of Japan’s published documents© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

30

Business Hotel Demand Strong and Growing
Business hotels benefit from both robust domestic demand and growing
inbound demand− 183M domestic business hotel guests in 2018, +1% YOY− 33M inbound business hotel guests in 2018, +16% YOY
No. of Guests by Hotel Type (Domestic)

No. of Guests by Hotel Type (Inbound)(million persons)(million persons)

200

40

2018 Business Hotel
Market Share 38%

2018 Business Hotel
Market Share 44%
150

30

100

20

50

10

0
2011

2012

2013

2014

2015

Business Hotels

Japanese Inns

Full-Service Hotels

Budget Hotels

2016

2017

Resort Hotels

2018

0
2011

2012

2013

2014

2015

Business Hotels

Japanese Inns

Full-Service Hotels

Budget Hotels

2016

2017

2018

Resort Hotels* Calculated by Ichigo Investment Advisors based on Japan Tourism Agency (JTA) “Statistical Survey of Travelers”© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

31

New Hotel Room Supply in Japan
No. of New Hotel Rooms (vs. March 31, 2018)
New Supply
Japanese Inns
Hotels% Increase of New Supply

250,000+28%

200,000

150,000+40%

100,000+33% +46%

50,000

+20%

+32%

+36%

+12%

+5%

+9%

Kumamoto

Hamamatsu

Okayama+14% +17% +25%

+10% +7%

0

KurashikiMatsuyama

Hiroshima

Kobe

Naha

Yokohama

Fukuoka

Kyoto

NagoyaSapporo

Osaka

Tokyo

* Increase of new supply relative to existing hotel rooms calculated by Ichigo Investment Advisors based on Ministry of Health, Labor, and Welfare’s“Report on Public Health Administration and Services” and hotel and restaurant data published June 7, 2019.
* % Increase of New Supply = New Supply / (Existing Hotels + Japanese Inns)© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

32

Appendix: Portfolio Details© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

33

Hotel Map
Tokyo
C-1

Hokkaido

Kanto
C-3

B-1

Hokuriku/Tokai
A-2

A-1

D-1

A-3

D-2

D-3

D-4

Variable Rent
Fixed Rent
Smile HotelTokyo Asagaya

Hotel Livemax
NihombashiHakozaki

Grandpark-Inn
Yokohama

Kinki (Kyoto/Osaka/Kobe)

ComfortHotel Kushiro

E-3

F-1

Comfort Hotel
Hamamatsu

Comfort Hotel
Hotel Wing
International Central International
AirportNagoyaComfort Hotel
SuzukaKyushu/Okinawa

Chugoku/Shikoku

E-2

E-1

Nest Hotel
Nest Hotel
Sapporo Ekimae Sapporo Odori

F-3

F-2

G-1

G-2

G-3

▶Sapporo
A-1

A-2▶Kushiro
A-3

Smile Hotel
Kyoto Shijo

Hotel Vista
Premio Kyoto*

Chisun Inn
Osaka
HommachiComfort Hotel
Okayama

Nest Hotel
Matsuyama

Valie Hotel
TenjinUrbain Hiroshima
Executive

Nest Hotel
Naha

Nest Hotel
Kumamoto▶KyotoE-1 E-2

E-4

E-5

F-4

E-3

Nest Hotel Osaka
Shinsaibashi

Court Hotel
Kurashiki

Valie Hotel
Hiroshima

C-1 C-3

E-5▶Okayama

Hotel Wing International
Kobe Shin Nagata Ekimae▶Tokyo▶OsakaF-5▶Suzuka▶Hiroshima F-4 F-1 E-4
D-4
G-1
F-3
▶Kobe
F-2
▶Fukuoka F-5▶Matsuyama▶NagoyaG-3
D-2 D-3▶Kumamoto* Sale announced on August 27, 2019
▶Okinawa
G-2© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

▶Yokohama B-1▶Hamamatsu
D-1

23 Hotels
JPY 54.4B(July 2019 rent-basis)34

Portfolio Growth
IPO(November 30, 2015)

January 2017
Fiscal Period

IPO Acquisitions

PO Acquisitions

9 hotels
JPY 20.4B

July 2017 through January 2019
Fiscal Period

10 hotels
JPY 27.2B(Appraisal NOI Yield 5.9%) (Appraisal NOI Yield 5.5%)

July 2019
Fiscal Period

July 2017

January 2018

January 2019

Bank Loan Acquisition(Appraisal NOI
Yield 5.0%)(Appraisal NOI
Yield 6.3%)(Appraisal NOI
Yield 6.9%)(Appraisal NOI Yield 6.9%)

1 hotelJPY 1.4B

1 hotelJPY 1.8B

1 hotelJPY 1.7B

2 hotels
JPY 3.7B

HotelsHokkaido: 2 Kyoto: 2
Nagoya: 1
Tokai: 1 Osaka: 1
Kobe: 1 Kyushu: 1

Hokkaido: 1 Tokyo: 3
Tokai: 2 Osaka: 1
Chugoku/Shikoku: 2
Okinawa: 1

Yokohama: 1

Chugoku/Shikoku: 1

Chugoku/Shikoku: 1

Nest Hotel Valie Hotel
Kumamoto Hiroshima
Kyushu: 1,
Chugoku/Shikoku: 1

Sale

None

None

None

None

1 HotelJPY 2.7B*

None

Portfolio
Size

9 Hotels : JPY 20.4B(January 2016 end)

19 Hotels
JPY 47.6B

20 Hotels
JPY 49.1B

21 Hotels
JPY 50.9B

21 Hotels
JPY 50.7B

23 Hotels
JPY 54.4B

IPO

Location

Kyushu
6.8%
Kobe
7.3%
Tokai
7.6%
Osaka
8.0%

*Gain on Sale
JPY 0.69B

Kyoto
39.6%

Nagoya13.1%
Hokkaido
17.7%

Geographic Diversification
Increases Earnings Stability
Steady Portfolio Growthvia Acquisitions

Acquisition price-basis© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

July 31, 2019

Yokohama
2.7%
Nagoya
4.9%
Kyushu6.6%
Okinawa
6.9%

Osaka
16.9%
Kyoto
14.8%

Hokkaido
7.2%
Tokyo
9.7%

Kobe
2.7%

Tokai
13.1%

Chugoku/
Shikoku
14.4%

Acquisition price-basis

35

Individual Hotel Summary
Hotel
No.

Hotel

Hotel Name

Lease Terms

Location

Leasable
Area
2

(m )

A-1

Nest Hotel Sapporo Ekimae

Variable + Fixed Rent

A-2

Nest Hotel Sapporo Odori

A-3

Comfort Hotel Kushiro

B-1

Jul 2019 Appraisal

Acquisition
Price(JPY M)

Book Value(JPY M)(A)

Value(JPY M) (B)Cap Rate(% )Unrealized
Gains (JPY M)(B) - (A)

Sapporo5,734.93

2,160

2,153

2,690

5.2

+536

Variable + Fixed Rent

Sapporo5,638.78

1,450

1,466

1,900

5.1

+433

Fixed Rent

Kushiro, Hokkaido

3,180.58

300

291

421

5.5

+129

Grandpark-Inn Yokohama

Fixed Rent

Yokohama

1,183.26

1,490

1,503

1,550

4.6

+46

C-1

Smile Hotel Tokyo Asagaya

Variable + Fixed Rent

Tokyo

2,721.70

3,910

3,987

4,370

4.4

+382

C-3

Hotel Livemax Nihombashi-Hakozaki

Fixed Rent

Tokyo

853.00

1,360

1,323

1,440

4.5

+116

D-1

Comfort Hotel Hamamatsu

Fixed Rent

Hamamatsu, Shizuoka

4,173.92

1,550

1,469

1,750

5.2

+280

D-2

Hotel Wing International Nagoya

Variable + Fixed Rent

Nagoya5,255.66

2,670

2,699

2,880

4.8

+180

D-3

Comfort Hotel Central International Airport

Fixed Rent

Tokoname, Aichi

11,599.63

5,308

5,345

5,880

4.0

+534

D-4

Comfort Hotel Suzuka

Fixed Rent

Suzuka, Mie

2,186.65

300

286

378

5.0

+91

E-1

Smile Hotel Kyoto Shijo

Variable + Fixed Rent

Kyoto

4,891.84

4,480

4,553

4,350

4.4

-203

E-2

Hotel Vista Premio Kyoto

Variable + Fixed Rent

Kyoto

3,867.66

3,600

3,580

3,820

4.2

+239

E-3

Chisun Inn Osaka Hommachi

Variable + Fixed Rent

Osaka

3,690.00

1,630

1,707

1,960

4.5

+252

E-4

Hotel Wing International Kobe Shin Nagata Ekimae

Variable + Fixed Rent

Kobe

4,540.90

1,490

1,424

1,800

4.7

+375

E-5

Nest Hotel Osaka Shinsaibashi

Variable + Fixed Rent

Osaka

8,057.26

7,600

7,695

7,550

4.5

-145

F-1

Comfort Hotel Okayama

Fixed Rent

Okayama

5,543.70

1,200

1,188

1,260

5.3

+71

F-2

Nest Hotel Matsuyama

Variable + Fixed Rent

Matsuyama, Ehime

6,671.94

1,610

1,664

2,020

5.7

+355

F-3

Urbain Hiroshima Executive

Fixed Rent

Hiroshima

2,756.20

1,800

1,839

2,080

5.3

+240

F-4

Court Hotel Kurashiki

Variable + Fixed Rent

Kurashiki, Okayama

3,964.19

1,725

1,811

2,070

5.0

+258

F-5

Valie Hotel Hiroshima

Variable + Fixed Rent

Hiroshima

4,332.50

1,500

1,529

1,730

4.9

+200

G-1

Valie Hotel Tenjin

Variable + Fixed Rent

Fukuoka

1,910.94

1,380

1,441

2,230

4.2

+788

G-2

Nest Hotel Naha

Variable + Fixed Rent

Naha, Okinawa

9,240.20

3,750

3,802

4,190

5.3

+387

G-3

Nest Hotel Kumamoto

Variable + Fixed Rent

Kumamoto

6,404.36

2,220

2,216

2,440

5.3

+223

23 Hotels

108,399.80

54,48354,98460,7594.7+5,774© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

36

Individual Hotel Operating Results(year-on-year)
Hotel No.

Hotel Name

Lease Terms

Location

No. of
Guest
Rooms

July 2019 (February 2019 - July 2019)
RevPAR (JPY)

Occupancy (%)

ADR (JPY)

Revenue (JPY M)

A-1

004 Nest Hotel Sapporo Ekimae

Variable + Fixed Rent

Sapporo162

11,129(+5.1%)

98.3(+0.4%)

11,322(+4.7%)

394.7(+5.6%)

A-2

008 Nest Hotel Sapporo Odori

Variable + Fixed Rent

Sapporo121

12,645(-0.2%)

96.7(-0.8%)

13,081(+0.6%)

300.0(-1.1%)

A-3

018 Comfort Hotel Kushiro

Fixed Rent

Kushiro, Hokkaido

126

4,219

(+17.1%)

75.5(+5.1%)

5,592(+11.5%)101.4(+16.0%)C-1

012 Smile Hotel Tokyo Asagaya

Variable + Fixed Rent

Tokyo

112

9,122

(+3.6%)

98.4(+3.1%)

9,268(+0.4%)

189.3(+2.9%)

D-1

006 Comfort Hotel Hamamatsu

Fixed Rent

Hamamatsu, Shizuoka

196

5,017

(+7.6%)

82.5(+4.0%)

6,084(+3.5%)

178.0(+7.6%)

D-2

003 Hotel Wing International Nagoya

Variable + Fixed Rent

Nagoya224

5,489(+1.7%)

87.0(+0.1%)

6,308(+1.6%)

245.2(+1.2%)

D-3

011 Comfort Hotel Central International Airport

Fixed Rent

Tokoname, Aichi

346

8,365

(+0.6%)

91.5(+0.8%)

9,138(-0.2%)

546.4(-4.4%)

D-4

019 Comfort Hotel Suzuka

Fixed Rent

Suzuka, Mie

105

4,497

(-2.6%)

75.6(+1.0%)

5,945(-3.5%)

86.3(-2.9%)

E-1

001 Smile Hotel Kyoto Shijo

Variable + Fixed Rent

Kyoto

144

7,833

(-17.3%)99.4(+1.4%)

7,877(-18.4%)222.3(-15.1%)E-2002 Hotel Vista Premio Kyoto

Variable + Fixed Rent

Kyoto

84

10,446(-15.1%)85.8(-8.5%)

12,179(-7.2%)

177.6(-13.4%)E-3005 Chisun Inn Osaka Hommachi

Variable + Fixed Rent

Osaka

130

5,696

(-20.9%)81.0(-8.7%)

7,031(-13.3%)134.0(-20.9%)E-5010 Nest Hotel Osaka Shinsaibashi

Variable + Fixed Rent

Osaka

302

7,419

(-18.6%)90.4(-3.9%)

8,207(-15.3%)436.5(-17.9%)F-1

017 Comfort Hotel Okayama

Fixed Rent

Okayama

208

5,347

(-4.7%)

88.4(-1.9%)

6,048(-2.9%)

210.5(-4.4%)

F-2

015 Nest Hotel Matsuyama

Variable + Fixed Rent

Matsuyama, Ehime

190

5,826

(+9.2%)

87.4(-1.7%)

6,670(+11.1%)287.6(+6.0%)

F-3

021 Urbain Hiroshima Executive

Fixed Rent

Hiroshima

171

6,553

(+2.5%)

91.9(+1.7%)

7,130(+0.8%)

202.8(+0.3%)

F-4

022 Court Hotel Kurashiki

Variable + Fixed Rent

Kurashiki, Okayama

104

8,360

(+16.4%)96.3(+1.1%)

8,685(+15.1%)

186.2(+16.8%)G-1

009 Valie Hotel Tenjin

Variable + Fixed Rent

Fukuoka

77

9,906(+6.9%)

97.3(+1.0%)

10,177(+5.9%)

147.2(+6.3%)

G-2

013 Nest Hotel Naha

Variable + Fixed Rent

Naha, Okinawa

200

8,348

(-6.9%)

83.9(-7.0%)

9,952(+0.2%)

430.0(-5.4%)

G-3

023 Nest Hotel Kumamoto

Variable + Fixed Rent

Kumamoto

201

4,788

(-8.8%)

77.4(-13.1%)6,189(+5.0%)

199.1(-10.3%)

Other

–

527

–

–

–

–

Variable Rent Hotels

2,355

7,773

(-5.5%)

89.7(-3.2%)

8,668(-2.4%)

2,885.5(-4.8%)

Fixed Rent Hotels

1,375

6,171

(+1.6%)

86.3(+1.1%)

7,154(+0.5%)

1,340.3(-0.8%)

Total

3,730

7,182

(-3.3%)

88.4(-1.7%)

8,122(-1.7%)

4,225.8(-3.6%)* Operating Results data for Hotel Livemax Nihombashi-Hakozaki and Grandpark-Inn Yokohama are consolidated under Other, because the hotel operators did not provide
consent to disclose hotel-specific data. Fixed Rent Hotels and Total include Hotel Livemax Nihombashi-Hakozaki’s operating results. Data for Hotel Wing International Kobe
Shin Nagata Ekimae are not included because it re-opened under the new-brand in June 2019.
© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

37

Individual Hotel Financials(JPY thousand)
A-1
Total

A-2

A-3

C-1

Nest Hotel Nest Hotel Comfort
Sapporo Sapporo
Hotel
EkimaeOdori
Kushiro

D-1

D-3

D-4

Smile
Comfort
Comfort
ComfortHotel
Hotel Central
Hotel
Hotel
Tokyo
International
Hamamatsu
SuzukaAsagaya
Airport

E-1

E-2

E-3

Smile
Hotel
Kyoto
Shijo

Hotel Vista
Premio
Kyoto

E-5

F-1

F-2

F-4

F-5

G-1

Chisun Inn Nest Hotel
Comfort
Court
Valie
Nest Hotel
Osaka
Osaka
Hotel
Hotel
Hotel
Matsuyama
Hommachi Shinsaibashi Okayama
Kurashiki Hiroshima

G-2

Valie
Hotel
TenjinG-3

Nest Hotel Nest Hotel
Naha
Kumamoto

Other(A) Rental Income

1,789,669

134,971

107,426

18,41994,49455,361

151,441

15,442

94,50175,00061,797

181,999

45,90096,87286,586

166

70,318

121,998

37,933339,036

Fixed Rent

984,145

31,12927,327

18,41930,041

55,361

151,441

15,44230,74475,00039,60066,54045,90036,341

31,665–

21,66442,611

13,891251,020

Variable Rent

735,493

103,841

80,098–64,452–––63,756–22,197

115,458–

60,53154,711–

48,654

79,38624,042

18,361Other Rent

70,030

–

–

–

–

–

–

–

–

–

–

–

–

–

209

166

–

–

–

69,655

177,885

9,719

11,548

5,456

7,162

3,505

14,359

3,049

6,332

11,367

4,937

16,827

5,914

6,843

5,837

85

4,742

8,558

915

50,722

Outsourcing
Fees

17,404

600

600

900

2,337

600

570

540

600

1,475

915

1,200

600

720

600

50

600

1,080

416

3,000

Insurance

2,696

148

155

81

89

93

273

47

142

100

99

242

137

196

104

9

55

234

96

388

RepairExpenses

18,648

3,427

1,901

–

555

115

403

271

233

1,850

270

1,296

883

922

823

–

350

2,326

35

2,984

Taxes

110,272

5,113

8,454

4,066

3,772

2,425

12,659

1,782

4,996

7,526

3,288

13,680

3,858

4,574

3,945

–

3,372

4,499

–

22,254

Other
Expenses

28,864

429

436

409

407

271

452

408

359

415

364

408

435

429

363

25

364

417

368

22,094

NOI(A) - (B)

1,611,783

125,252

95,877

12,96287,331

51,856

137,082

12,393

88,16863,632

56,860165,171

39,98590,02880,74880

65,576

113,439

37,018288,314(D) Depreciation

328,558

15,338

14,9504,943

26,462

14,63532,443

4,156

16,15913,9196,735

34,108

12,832

17,955

10,142–

8,751

35,642

12,431

46,947

Net Rental
Income(C) - (D)1,283,224

109,91380,927

8,019

60,86937,220104,639

8,236

72,00949,71350,125131,062

27,15372,07270,60680

56,82577,797

24,586

241,366(B)(C)

RentalExpenses* Rents for Hotel Wing International Nagoya, Hotel Wing International Kobe Shin Nagata Ekimae, Hotel Livemax Nihombashi-Hakozaki, Grandpark-Inn Yokohama, and Urbain
Hiroshima Executive as well as retail rents of Hotel Vista Premio Kyoto, Chisun Inn Osaka Honmachi, Smile Hotel Tokyo Asagaya and Nest Hotel Kumamoto are included in
Other, as the operators did not provide consent to disclose the data.

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

38

Fixed/Variable Rent, RevPAR, ADR, & Occupancy Trends
Fixed/Variable Rent

Total Rent
(excludes Other Revenue)(JPY thousand)Jul 2018

Jan 2019

Rent

Jul 2019

Ratio

Rent

Ratio

Rent

Ratio

988,14754.5%

1,020,028

58.4%

1,029,238

57.5%

Fixed rent from Operators

952,65352.5%

984,468

56.4%

984,145

55.0%

Other (Rent from Retail Tenants)

35,4942.0%

35,5592.0%

45,0922.5%

803,40144.3%

701,67140.2%

735,493

41.1%

Other (Utilites income)

22,515

1.2%

23,668

1.4%

24,937

1.4%

Total

1,814,064

100.0%

1,745,367

100.0%

1,789,669

100.0%

Fixed

Variable

Variable
Rent
42.8%

Fixed
Rent
57.2%

(July 2019 rent-basis)

Operating Results (Feb 2018 – July 2019)
RevPAR (right)

ADR (right)(JPY)

Occupancy (left)

100%

10,000

80%

8,000

60%

6,000

40%

4,000

20%

2,000

0

0%
Aug 2018

Sep 2018

Oct 2018

Nov 2018

Dec 2018

Jan 2019

Feb 2019

Mar 2019© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Apr 2019

May 2019

Jun 2019

Jul 2019

39

Variable Rent Hotel Details
A-1 Nest Hotel Sapporo Ekimae
Location

SapporoAccess5-minute walk from
Sapporo Station on
Sapporo City Metro
Namboku LineOperator

Nest Hotel Japan
Corporation

Operating Results (August 2019 – July 2019)100%

Occupancy(left)(JPY)
25,00080%

20,00060%

15,00040%

10,0005,000

Guest Rooms

162

20%

AcquisitionPrice

JPY 2.16B

0%

ADR(right)

RevPAR(right)0
Aug 2018

Nov 2018

Feb 2019

May 2019

A-2 Nest Hotel Sapporo Odori
Location

SapporoAccess4-minute walk from
Odori Station on
Sapporo City Metro
Namboku LineOperator

Nest Hotel Japan
Corporation

Guest Rooms

121

AcquisitionPrice

JPY 1.45B

Operating Results (August 2019 – July 2019)

ADR(right)

RevPAR(right)Occupancy(left)(JPY)

100%

25,00080%

20,00060%

15,00040%

10,000

20%

5,000

0%

0
Aug 2018© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Nov 2018

Feb 2019

May 2019

40

Variable Rent Hotel Details
C-1 Smile Hotel Tokyo Asagaya
Location

Suginami-ku, Tokyo

Access1-minute walk from
Asagaya Station on JR
Chuo/Sobu LineOperator

K.K. Hospitality
Operations

Guest Rooms

112

AcquisitionPrice

JPY 3.91B

Operating Results (August 2019 – July 2019)100%

Occupancy(left)(JPY)
12,50080%

10,000

60%

7,500

40%

5,000

20%

2,500

ADR
(right)

RevPAR(right)00%
Aug 2018

Nov 2018

Feb 2019

May 2019

D-2 Hotel Wing International Nagoya
Location

NagoyaAccess2-minute walk from
Marunouchi Station on
both Nagoya Subway
Network SakuradoriLine and Tsurumai
Line

Operating Results (August 2019 – July 2019)100%

Occupancy(left)(JPY)
12,50080%

10,00060%

7,500

Forbes Co., Ltd.

40%

5,000

Guest Rooms

224

20%

2,500

AcquisitionPrice

JPY 2.67B

0%Operator

ADR(right)

RevPAR(right)0
Aug 2018© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Nov 2018

Feb 2019

May 2019

41

Variable Rent Hotel Details
E-1 Smile Hotel Kyoto Shijo
Location

Kyoto

Operating Results (August 2019 – July 2019)

Access5-minute walk from
Shijo Station on Kyoto
City Subway Karasuma
Line and Karasuma
Station on Hankyu
Kyoto Main Line100%

25,00080%

20,00060%

15,000K.K. Hospitality
Operations40%

10,000

Guest Rooms

144

20%

5,000

AcquisitionPrice

JPY 4.48B

0%

Operator

ADR(right)

RevPAR(right)Occupancy(left)(JPY)

0
Aug 2018

Nov 2018

Feb 2019

May 2019

E-2 Hotel Vista Premio Kyoto
Location

Kyoto

Access5-minute walk from
Kyoto Shiyakushomae
Station on Kyoto City
Subway Tozai LineOperator

Vista HotelManagement Co., Ltd.

Guest Rooms

84

AcquisitionPrice

JPY 3.60B

Operating Results (August 2019 – July 2019)100%

Occupancy(left)(JPY)
25,00080%

20,00060%

15,00040%

10,000

20%

5,000

ADR
(right)

RevPAR(right)00%
Aug 2018

Nov 2018

Feb 2019

May 2019* Sale of hotel announced on August 27, 2019

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

42

Variable Rent Hotel Details
E-3 Chisun Inn Osaka Hommachi
Location

Osaka

Operating Results (August 2019 – July 2019)

Access5-minute walk from
Sakaisuji-Hommachi
Station on Osaka
Municipal Subway
Chuo Line100%

12,50080%

10,000

60%

7,500

40%

5,000
2,500

Operator

SHR Hotel Lease Co.,Ltd.

Guest Rooms

130

20%

AcquisitionPrice

JPY 1.63B

0%

ADR(right)

RevPAR(right)Occupancy(left)(JPY)

0
Aug 2018

Nov 2018

Feb 2019

May 2019

E-4 Hotel Wing International Kobe Shin Nagata Ekimae
Location

Kobe

Access2-minute walk from
Shin Nagata Station
on JR Kobe Line and
JR Sanyo Honsen LineOperating Results (August 2019 – July 2019)

ADR(right)

RevPAR(right)Occupancy(left)(JPY)100%

12,50080%

10,00060%

7,500

Forbes Co., Ltd.

40%

5,000

Guest Rooms

133

20%

2,500

AcquisitionPrice

JPY 1.49B

0%Operator0
Aug 2018

Nov 2018

Feb 2019

May 2019* Hotel name changed from Hotel Suave Kobe Asuta on March 1, 2019. Rebranded and reopened in June 2019.

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

43

Variable Rent Hotel Details
E-5 Nest Hotel Osaka Shinsaibashi
Location

Osaka

Access1-minute walk from
Nagahoribashi Station
on Osaka Municipal
Subway Sakaisuji LineOperating Results (August 2019 – July 2019)100%

Occupancy(left)(JPY)
12,50080%

10,00060%

7,500

Nest Hotel Japan
Corporation

40%

5,000

Guest Rooms

302

20%

2,500

AcquisitionPrice

JPY 7.60B

0%Operator

ADR(right)

RevPAR(right)0
Aug 2018

Nov 2018

Feb 2019

May 2019

F-2 Nest Hotel Matsuyama
Location

AccessOperator

Matsuyama, Ehime
25-minute drive from
Matsuyama Airport,
3-minute walk from
Katsuyamacho Station
on Iyo Railway JonanLine
Nest Hotel Japan
Corporation

Operating Results (August 2019 – July 2019)100%

Occupancy(left)(JPY)
12,50080%

10,000

60%

7,500

40%

5,000
2,500

Guest Rooms

190

20%

AcquisitionPrice

JPY 1.61B

0%

ADR(right)

RevPAR(right)0
Aug 2018© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Nov 2018

Feb 2019

May 2019

44

Variable Rent Hotel Details
F-4 Court Hotel Kurashiki
Location

Kurashiki, Okayama

Access8-minute walk from
Kurashiki Station on
JR Sanyo Main LineOperating Results (August 2019 – July 2019)

ADR(right)

RevPAR(right)Occupancy(left)(JPY)100%

12,50080%

10,00060%

7,500

The Court Co., Ltd.

40%

5,000

Guest Rooms

104

20%

2,500

AcquisitionPrice

JPY 1.73B

0%Operator0
Aug 2018

Nov 2018

Feb 2019

May 2019

F-5 Valie Hotel Hiroshima
Location

Hiroshima

Access3-minute walk from
Jogakuin-mae Station
on Hiroden Tram LineOperator

The Court Co., Ltd.

Guest Rooms

171

AcquisitionPrice

JPY 1.55B

Valie Hotel Hiroshima was acquired on July 19, 2019 andis scheduled to re-open in September 2019 after rebranding.
The previous owner did not give consent to disclose data about
results prior to the acquisition.

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

45

Variable Rent Hotel Details
G-1 Valie Hotel Tenjin
Location

Fukuoka

Access6-minute walk from
Tenjin Station on
Fukuoka City Subway
Kuko LineOperator

The Court Co., Ltd.

Guest Rooms

77

AcquisitionPrice

JPY 1.38B

Operating Results (August 2019 – July 2019)

ADR(right)

RevPAR(right)Occupancy(left)(JPY)100%

12,50080%

10,000

60%

7,500

40%

5,000

20%

2,500
0

0%
Aug 2018

Nov 2018

Feb 2019

May 2019

G-2 Nest Hotel Naha
Location

AccessOperatorNaha, Okinawa
7-minute drive fromNaha Airport, 5-minute
walk from Asahibashi
Station on Okinawa
Urban Monorail
Nest Hotel Japan
Corporation

Operating Results (August 2019 – July 2019)100%

Occupancy(left)(JPY)
12,50080%

10,000

60%

7,500

40%

5,000
2,500

Guest Rooms

200

20%

AcquisitionPrice

JPY 3.75B

0%

ADR(right)

RevPAR(right)0
Aug 2018© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Nov 2018

Feb 2019

May 2019

46

Variable Rent Hotel Details
G-3 Nest Hotel Kumamoto
Location

Kumamoto

Access2-minute walk from
Nishikarashimacho
Station on Kumamoto
City Tram LineOperator

Nest Hotel Japan
Corporation

Operating Results (August 2019 – July 2019)100%

Occupancy(left)(JPY)
12,50080%

10,000

60%

7,500

40%

5,000
2,500

Guest Rooms

201

20%

AcquisitionPrice

JPY 2.22B

0%

ADR(right)

RevPAR(right)0
Aug 2018© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Nov 2018

Feb 2019

May 2019

47

Fixed Rent Hotel Details
A-3 Comfort Hotel Kushiro
Location

Kushiro, Hokkaido

B-1 Grandpark-Inn Yokohama
Location

Yokohama

Access2-minute walk from
Kushiro Station on JR
Nemuro Main Line

Access6-minute walk from
Yokohama Station on
JR Line, private
railways, and subway

Operator

Greens Co., Ltd.

Operator

MiddleWood Co., Ltd.

Guest Rooms

126

Guest Rooms

175

AcquisitionPrice

JPY 300M

AcquisitionPrice

JPY 1.49B

C-3 Hotel Livemax Nihombashi-Hakozaki
Location

Chuo-ku, Tokyo

D-1 Comfort Hotel Hamamatsu
Location

Hamamatsu, Shizuoka

Access3-minute walk from
Suitengumae Station
on Tokyo Metro
Hanzomon Line

Access2-minute walk from
Hamamatsu Station on
JR Tokaido Main Line,
Tokaido Shinkansen

Operator

Live Max Inc.

Operator

Greens Co., Ltd.

Guest Rooms

48

Guest Rooms

196

AcquisitionPrice

JPY 1.36B

AcquisitionPrice

JPY 1.55B© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

48

Fixed Rent Hotel Details
D-3 Comfort Hotel Central International Airport

D-4 Comfort Hotel Suzuka

Location

Tokoname, Aichi

LocationSuzuka, Mie

Access5-minute walk from Central
International Airport,
3-minute walk from Central
International Airport Station
on Meitetsu Airport Line

Access3-minute walk from
Shirako Station on
Kintetsu Nagoya LineOperator

Greens Co., Ltd.

Operator

Greens Co., Ltd.

Guest
Rooms

346

Guest Rooms

105

JPY 5.31B

AcquisitionPrice

JPY 300M

AcquisitionPrice

F-1 Comfort Hotel Okayama

F-3 Urbain Hiroshima Executive
Location

Hiroshima

Access15-minute walk from
Okayama Station on
Sanyo Shinkansen,
Sanyo Main Line, Uno
Line

Access6-minute walk from
Hiroshima Station on
JR Sanyo Shinkansen
and Sanyo Main LineOperator

Greens Co., Ltd.

Operator

Yuki Corporation

Location

Okayama

Guest Rooms

208

Guest Rooms

171

AcquisitionPrice

JPY 1.20B

AcquisitionPrice

JPY 1.80B© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

49

Appendix: Loan Details & Shareholder Composition© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

50

Stable Financial Base
− Shorter-term loans are floating rate to take advantage of current low
interest rates− 80% of loans are fixed to hedge against a rise in interest rates
Outstanding Loan Balance
Jul 31, 2017
AmountJan 31, 2018

Jul 31, 2018

Jan 31, 2019

July 31, 2019

JPY 19.95B

JPY 21.75B

JPY 21.75B

JPY 21.75B

JPY 25.47B

Long-Term Loan Ratio

100.0%

100.0%

100.0%

100.0%

100.0%

Fixed Rate Ratio

71.4%

73.8%

73.8%

80.7%

83.5%

Average Interest Rate

0.88%

0.88%

0.88%

0.89%

0.86%

Average Remaining
Maturity

4.1 years

3.6 years

3.1 years

3.2 years

3.0 years

LTV (Total Assets Basis)

37.1%

39.2%

39.1%

38.8%

43.0%

Distribution of Loan Maturities(JPY M)
6,000■ Fixed Rate ■ Floating Rate
5,250

4,000

4,500

4,200

4,500
3,000

2,000

2,220

1,800
0
Jul 2019

Jan 2020

Jul 2020

Jan 2021

Jul 2021

Jan 2022

Jul 2022

Jan 2023© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Jul 2023

Jan 2024

Jul 2024

Jan 2025

51

Loan Details
Loan Balances
Loan

Amount(JPY million)

LenderFloating/
Fixed

Interest Rate(%)

Borrowing Date

Maturity

Term Loan II

SMBC, Mizuho, Shinsei, Resona

5,250

Fixed

1.08000%

November 30, 2015

November 30, 2020

Term Loan III

SMBC, Mizuho, Shinsei, Resona, Fukuoka, Nishi-Nippon City

2,000

Floating

0.61545%

August 17, 2016

February 28, 2020

Term Loan IV

SMBC, Mizuho, Shinsei, Resona, Fukuoka, Nishi-Nippon City

4,500

Fixed

0.90750%

August 17, 2016

February 28, 2023

Term Loan V

SMBC, Mizuho, Shinsei, Resona, Fukuoka, Nishi-Nippon City

4,500

Fixed

0.98500%

August 17, 2016

August 31, 2023

Term Loan VI

SMBC

450

Floating

0.56545%

March 27, 2017

February 28, 2020

Term Loan VII

SMBC, Mizuho, Shinsei, Resona, Fukuoka, Nishi-Nippon City

1,800

Fixed

0.78750%

August 1, 2017

January 31, 2023

Term Loan VIII

SMBC, Mizuho, Shinsei, Resona

1,750

Floating

0.46545%

November 30, 2018

May 29, 2020

Term Loan IX

SMBC, Mizuho, Shinsei, Resona

1,500

Fixed

0.92000%

November 30, 2018

November 30, 2024

Term Loan X

SMBC, Mizuho, Shinsei, Resona, Nishi-Nippon City

2,220

Fixed

0.75450%

April 25, 2019

April 30, 2024

Term Loan XI

SMBC, Mizuho, Aozora, Shinsei, Resona

1,500

Fixed

0.73575%

July 19, 2019

November 29, 2024

Total

25,470

Lender Composition
Fukuoka3%
Nishi-Nippon City
4%

Average Remaining Loan Term 3.0 years

Fixed vs. Floating

Strong Lender Group

Aozora1%

LTV Control

Floating
16.5%

Resona10%

Average 0.86%

Interest Rate Risk Management
SMBC
39%

Shinsei
12%

Mizuho
31%

Fixed
83.5%

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Stable Financial Position52

Shareholder Composition
Major Shareholders (as of July 31, 2019)
Name
1

Japan Trustee Services Bank, Ltd., Trust AccountBy Number of Shares Held:
No. ofShares30,960Foreign Corporations & Individuals
Non-Financial Domestic Corporations

Share
12.1%

The Master Trust Bank of Japan, Trust Account

26,3333

Trust & Custody Service Bank, Ltd.,
Securities Investment Trust Account

4

The Nomura Trust and Banking Co., Ltd.,
Investment Trust Account

9,373

3.7%

5

Ichigo Inc. (Sponsor)

6,500

2.5%

6

Ichigo Trust Pte. Ltd.

6,424

2.5%

7

GOLDMAN SACHS INTERNATIONAL

5,872

2.3%

8

SIX SIS LTD.

5,133

2.0%

9

Morgan Stanley MUFG Securities Co., Ltd.

3,835

1.5%

3,477

1.4%

13,068

10.3%(Shares)

100%
60,448 shares(23.7%)

2

Domestic Financial Institutions
Domestic Individuals

80%
18,870 shares(7.4%)

5.1%
60%

95,188 shares(37.3%)

45,576 shares(17.8%)
18,843 shares(7.3%)

40,149 shares(15.7%)
16,748 shares(6.5%)

101,053 shares(39.6%)

106,633 shares(41.8%)

89,502 shares(35.1%)

91,444 shares(35.8%)Jan 2019（254,974）

Jul 2019（254,974）

40%

10 CGML-LONDON EQUITY
Total

110,975

43.5%

20%

80,468 shares(31.5%)

0%
Jul 2018(Outstanding Shares) （254,974）

By Number of Shareholders:

Domestic Individuals
Domestic Financial Institutions
City Banks, trust banks
Regional banks
Other (including securities companies)
Non-Financial Domestic Corporations
Foreign Corporations & Individuals
Total© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Jul 31, 2019
Jul 31, 2018
Jan 31, 2019
Shareholders Shareholders Shareholders
Share
11,29913,101
13,415
97.4%
54
48
54
0.4%
7
7
7
0.1%
4
3
2
–
43
38
45
0.3%
183
218
220
1.6%
107
78
88
0.6%
11,643
13,445
13,777100.0%

53

Appendix: Growth Roadmap, Sponsor,
Shareholder Alignment© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

54

Strong Growth Track Record
Gains on Sale from Smile Hotel Asakusa Sale2

NAV per Share (JPY)DPS (JPY)

102,472

137,197

107,462

139,940

143,040

146,317

146,580

3,096

113,393

2,825

145,727

5,457

3,302

3,352

July 201720 Hotels
49.1B

January 2018
21 Hotels
50.9B

July 2018
21 Hotels
50.9B

1 HotelAcquisition(New Loan)

3,137

3,101

January 201719 Hotels
47.6B

3,154

1,3751

No. of Hotels
Portfolio Size

IPO
9 Hotels
20.4B

January 2016
9 Hotels
20.4B

July 2016
9 Hotels
20.4B

EventsIPO

PublicOffering

9 HotelAcquisitions

10 HotelAcquisitions

January 201921 Hotels
50.7B

July 201923 Hotels
54.4B

1 HotelAcquisition(New Loan)

Acquisition
and Sale

2 HotelAcquisitions(New Loan)

Share
Buyback andCancellation

Full
Distribution of
Gains on Sale
as Dividend
New AM Fee
Structure

1 Annualized January 2016 DPS (JPY 471)

Refinance

2 Unrealized gains of Smile Hotel Asakusa (sold in August 2018) = (Sales price – book value at sale) / number of shares outstanding© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

55

Growth Strategy Roadmap
Flexibly Responding to Market Environment
Stage I

Stage II

Continuous Dividend Growth via External Growth, Organic Growth, and Strong Financial Base

External
Growth• Drive higher earnings via economies of scale from increased
asset size
• Invest primarily in stay-only hotels• Acquisition of conversion-feasible assets and lodging
facilities such as serviced apartments• Asset acquisitions via SPCs
• Asset acquisitions using low cost borrowing capacity (LTV)

Enhance operational efficiency by monitoring operations and providing advice to partner hotel operators
Increase rents and earnings through value-add capex• Minimize expenses via collaboration with operators• Increase earnings via more favorable lease contracts,
rebranding, etc.

• Examine opportunities for large-scale renovations andrebranding to increase earnings• Further increase earnings via more favorable lease contracts,
rebranding, etc.

Financing• Maintain a strong lender base
• Appropriate LTV• Manage interest rate risk
• Prepare to acquire credit rating• Shift to no fixed fee, performance fee-only structure• Acquire credit rating• Diversify financing• Continue to control LTV and manage interest rate risk
• Prepare to enter global REIT indices

Other

Organic
Growth••• Construct a diversified portfolio to pursue both income
stability and earnings growth• Maximize dividend and earnings via unrealized gains via asset
acquisitions and sales• Acquire prime-location full-service hotels and resort hotels in
addition to stay-only hotels• Increase portfolio size and generate scale efficiencies via
acquisitions of newly built hotels in addition to value-add ofexisting hotels• Conduct share buybacks to increase dividend and maintainappropriate share price• Conduct share buybacks to increase dividend and maintainappropriate share price• Promote responsiveness to disasters (Respond to ESG
requirements)© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

56

Ichigo Hotel’s Sponsor: Ichigo (2337)
Core Businesses: Asset Management, Sustainable Real Estate, Clean Energy‒‒‒‒

Also manages Ichigo Office (8975), Ichigo Hotel (3463), and Ichigo Green (9282)
TSE First Section, JPX-Nikkei 400 Member
Deeply committed to CSR and Sustainability
Japan’s first zero-carbon listed real estate company©J.LEAGUE

Key Ichigo Subsidiaries
IchigoThe word “Ichigo” comes from the ancient Japanese
proverb, Ichigo Ichie, literally meaning “One lifetime,
one encounter.” The phrase was first used by a 16th
century master of the tea ceremony, Sen no Rikyu.
He called upon his disciples to give total focus andsincerity to each act of the tea ceremony for every
guest, because that particular moment will only exist
once and must be fully lived and realized.
Ichigo embraces the Ichigo Ichie philosophy ofsincerity and service, and works to build strong longterm relationships to support the success of ourclients, shareholders, and all stakeholders.

(Weightlifting)

Ichigo Investment Advisors

Asset manager of Ichigo Office (8975), Ichigo Hotel (3463), and Ichigo
Green (9282)

Ichigo Estate

Real estate value-add

Ichigo ECO Energy

Clean energy business focusing on utility-scale solar power production,
making purposeful use of idle land nationwide

Ichigo Owners

Real estate investment services

Ichigo Land Shinchiku

Real estate value-add

Ichigo Real Estate Services Fukuoka

Real estate business centered on Fukuoka

Ichigo Marché

Operator of Matsudo Nanbu wholesale market in Chiba Prefecture

Miyako City

Operator of Miyako City shopping mall in Miyazaki Prefecture

CentroNew real estate-related businesses

Storage Plus

High-grade self storage

Ichigo Animation

Japanese anime studio & real estate-related content developer

Hakata Hotels

Hotel operator(TSE First Section 2337)

Ichigo Preserves andImproves Real Estate

Hiromi Miyake© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

57

Synergies Between Ichigo Hotel and Sponsor‒ Strengthen acquisitions through leveraging Ichigo’s sourcing network‒ Increase asset value through Ichigo’s real estate value-add capabilities‒ Drive higher returns for Ichigo Hotel shareholders
Ichigo Hotel (3463)

Buy

Sponsor: Ichigo (2337)

Hotel

Value‐Add

Buy

Buy

Preserve & Improve
Sell

Long-Term Asset Management(Grow Earnings for Shareholders)







Value-add capex
On-going renovation and equipment renewal
Increase hotel attractiveness & competitiveness
Grow earnings via collaboration with hotel
operators
Grow earnings via rebranding and improving
contract terms
Grow earnings via smart cost control

Sell

Value-Add(Increase Asset Value)

Role


Hard





Soft




Rectify building code issues
Seismic and safety reinforcement
Large-scale structural and equipment renewal
Change hotel operator/brandImprove contract terms
Improve hotel operations

Third-Party Investors© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Sell

58

First J-REIT No Fixed Fee, Performance Fee-Only Structure
Overwhelming Shareholder Support (99.3% Yes Vote at AGM)
Before Change(Until January 31, 2019)

Asset Management Fee Structure

Asset
SizeBased

EarningsBased

After Change(From February 1, 2019)

AM Fee I

Total Asset Value

X

0.4%

–

Asset
Acquisition Fee

Acquisition Price

X

1%

–

Asset
Sale Fee

Sale Price

X

0.5%

–

AM Fee II(NOI & Dividend
Performance Fee)NOI x Dividend

X

0.002%

0.0036%

Increased

Gains on Sale
Performance Fee

Gains on Sale

X

－

15%

New

EliminatedNote: The Gains on Sale Performance Fee has a high-water mark, so that it will only be paid if Ichigo Hotel’s cumulative Gains/Losses on Sales to-date are positive.

‒ Fee Change Outcomes Support Ichigo Hotel earnings growth and shareholder value creation
 Support proactive, dynamic (vs. static) management of Ichigo Hotel assets on behalf ofshareholders© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

59

Ichigo Hotel Overview
Ichigo Hotel
Name

Ichigo Hotel REIT Investment Corporation

Securities Code3463

Address

1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo

Executive Director

Osamu Miyashita

Fiscal Periods

January (August 1 - January 31) and July (February 1 - July 31)

Asset Management Company
Name

Ichigo Investment Advisors Co., Ltd.

President

Hiroshi Iwai

Registration &Membership

Financial Instruments Dealer License (Investment
Management Services, Investment Advisory & Agency
Services, and Type II Financial Instruments Services)
Minister of Finance, Kanto Financial Bureau #318

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

60

MEMO

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

61

MEMO

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

62

Disclaimer
These materials are for informational purposes only, and do not constitute or form a part of, and should not be construed as,
an offer to sell or buy securities of Ichigo Hotel REIT Investment Corporation (Ichigo Hotel ).
These materials may contain forward-looking statements regarding the intent, belief or current expectations of Ichigo Hotelwith respect to financial condition and future results. These statements are based on certain assumptions founded on
currently available information. Accordingly, such statements are subject to risks and uncertainties, and there is no assurance
as to actual financial conditions or future results. Actual results may vary from those indicated in the forward-looking
statements.
In creating these materials, Ichigo Hotel and Ichigo Investment Advisors Co., Ltd. (IIA) have sought to provide accurate
information. However, there can be no assurance given as to the accuracy, certainty, validity or fairness of any suchinformation. The content of these materials is also subject to revision or retraction without prior notice.
This document is a translation. If there is any discrepancy between the Japanese version and the English translation,
the Japanese version shall prevail.

Make The World
More Sustainable

Contact:
Ichigo Hotel IR Desk (3463)
TEL: +81-3-3502-4892
E-mail： ir_ichigo-hotel@ichigo.gr.jp
www.ichigo-hotel.co.jp/english
Ichigo is Japan’s first zero-carbon listed real estate company. We are taking
responsibility for our environmental footprint by offsetting our carbon emissions
and investing in low-carbon technologies such as solar energy.

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

63