Make The World
More Sustainable[Provisional Translation Only]
This English translation of the original Japanese document is provided solely for information purposes.
Should there be any discrepancies between this translation and the Japanese original, the latter shall prevail.

March 17, 2022
IssuerIchigo Hotel REIT Investment Corporation (“Ichigo Hotel,” 3463)
1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo
Representative: Osamu Miyashita, Executive Director
www.ichigo-hotel.co.jp/en
Asset Management Company
Ichigo Investment Advisors Co., Ltd.
Representative: Hiroshi Iwai, President
Inquiries: Hidehito Iwasaka, Head of Ichigo Hotel
Tel: +81-3-3502-4892
January 2022 Fiscal Period Earning Results Versus Forecastand Forecast Revision for the July 2022 Fiscal Period
Because Ichigo Hotel’s January 2022 earnings results announced today differed from its
forecast in the January 25, 2022 release “Earnings Forecast Revision for the January2022 Fiscal Period,” Ichigo Hotel is detailing the difference between the results and theforecast below.
Ichigo Hotel is also revising upward its July 2022 fiscal period earnings forecast
announced in the September 14, 2021 release “July 2021 Fiscal Period Earnings.”
1. January 2022 Earnings Results vs. Forecast(JPY million)
Operating
ProfitRecurring
ProfitForecast (A)1,102414

209

282

1,108Results (B)1,125472

274

342

1,345

Difference(B) - (A)+23+57+64+60+237% Change+2.1%+13.8%+30.9%+21.3%+21.4%

Reference:
January 2021

1,035409

210

209823

Reference: Net Income per Share: JPY 1,345
Period-end number of shares outstanding: 254,974 shares

1Net
IncomeDividendper Share(JPY)

OperatingRevenue2. July 2022 Earnings Forecast Revision(JPY million)

Operating
ProfitRecurring
Profit

1,024395

170

1696661,069

421

214213838+44+26+43+43+172% Change+4.3%+6.6%+25.7%+25.8%+25.8%

Reference:
July 2021 Actual

1,117465

269

268

1,055

Previous Forecast(A)
New Forecast(B)
Difference(B) - (A)Net
IncomeDividendper Share(JPY)

Operating
Revenue

Reference: Net Income per Share: JPY 838
Forecast period-end number of shares outstanding: 254,974 shares
Note: The new forecast is based on the “Preconditions for the July 2022 Earnings
Forecast” on page 4. Actual results may vary due to changes in circumstances, so these
forecasts should not be construed as a guarantee of such results. Ichigo Hotel will make aforecast revision should a material discrepancy emerge between this forecast and results.
3. January 2022 Earnings Results and July 2022 Earnings Forecast Revision Rationale
January 2022 Earnings Results
January 2022 fiscal period earnings was higher than forecast on the back of greater thanexpected variable rent at some of the hotels in December 2021 and January 2022 due toincreased occupancy.
As stated in the Preconditions for the January 2022 Fiscal Period in the January 25, 2022
release “Earnings Forecast Revision for the January 2022 Fiscal Period,” Ichigo Hotel
expected to record operating expenses of JPY 37.7 million for Covid-related hotel
operator support and/or potential rent reductions. However, Ichigo Hotel did not incursuch expenses because no rent reductions were granted.
As a result, January 2022 recurring profit and dividend per share increased by JPY 64
million (+30.9%) and JPY 237 (+21.4%), respectively, versus the forecast announced onJanuary 25, 2022.
July 2022 Earnings Forecast Revision Rationale
2022 started with a new wave of Covid caused by the Omicron variant, resulting in theJapanese government declaring a quasi-state of emergency. Although hotel demand isgradually recovering on the back of the Covid vaccine rollout, a full-blown recovery isexpected to take more time.
Given these conditions, Ichigo Hotel expects expenses such as AM fee, insurance, andrepair expenses to increase. Meanwhile, borrowing-related expenses are forecast todecrease, and variable rent is forecast to increase due to the leasing of all guest rooms atseveral hotels to local governments.

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As a result, Ichigo Hotel is revising upward its July 2022 dividend per share by JPY 172(+25.8%) versus the previous forecast announced on September 14, 2021.
Should any further change to the outlook for operating results arise, Ichigo Hotel willpromptly disclose the details.

3Preconditions for the July 2022 Earnings Forecast
Preconditions
PeriodNumber ofHotels

 February 1, 2022 to July 31, 2022 (181 days)
 23 hotels
 The Court Hotel Kurashiki had an operator change on December 15, 2021 andwas rebranded and reopened as The OneFive Garden Kurashiki on February 1,2022.
Within operating revenue, rental income is forecast based on current lease contracts,
taking into consideration such factors as hotel and market conditions.1
Forecast Operating Performance2

3Occupancy
ADR4

July 2022 Fiscal Period
73.0%
JPY 4,891

1

OperatingRevenue

The forecast rental income assumes operators and tenants will fully pay theircontractual rents without delay or default.
2The 16 variable rent hotels are: Smile Hotel Kyoto Shijo, Hotel Wing InternationalNagoya, Nest Hotel Sapporo Ekimae, The OneFive Osaka Sakaisuji, Hotel Wing
International Kobe Shin Nagata Ekimae, Nest Hotel Sapporo Odori, The OneFive
Fukuoka Tenjin, Nest Hotel Osaka Shinsaibashi, Smile Hotel Tokyo Asagaya, NestHotel Matsuyama, The OneFive Okayama, Capsule Plus Yokohama, Court HotelKurashiki, Nest Hotel Kumamoto, Valie Hotel Hiroshima, and HOTEL EMITSHIBUYA. However, data for Capsule Plus Yokohama is excluded from the above
forecast because the operator did not give consent to disclose forecasts.
3Occupancy is calculated with the following formula:Occupancy = Total number of guest rooms occupied during the period / (totalnumber of guest rooms * number of days hotel was in operation during the period)
4ADR or Average Daily Rate is calculated with the following formula:
ADR = Total sales from accommodation (excluding restaurant charges and otherservice fees) / number of guest rooms occupied during the period
Details of the July 2022 Rental Income Forecast by Hotel(JPY million)
Fixed Rent/
Minimum Variable
Hotel Name
Guaranteed
RentRent
Smile Hotel Kyoto Shijo
30–Nest Hotel Sapporo Ekimae
3111
The OneFive Osaka Sakaisuji
11
Comfort Hotel Hamamatsu
55–
Nest Hotel Sapporo Odori
27–
The OneFive Fukuoka Tenjin
34–
Nest Hotel Osaka Shinsaibashi
66–
Comfort Hotel Central International Airport
151–
4Total
30
42255
27
3466
151

Smile Hotel Tokyo Asagaya
Nest Hotel Matsuyama
The OneFive Okayama
Comfort Hotel Kushiro
Comfort Hotel Suzuka
Court Hotel Kurashiki
Nest Hotel Kumamoto
Valie Hotel Hiroshima
HOTEL EMIT SHIBUYAOther1Total

61
3670
1815–
251747
210
902

–
8–––
32743–
2712261
4470
18154526147
238
1,024

1Figures for Hotel Wing International Nagoya, Hotel Wing International Kobe
Shin Nagata Ekimae, Hotel Livemax Nihombashi-Hakozaki, Capsule Plus
Yokohama, Urbain Hiroshima Executive, and Washington Hotel Plaza
Shimonoseki Eki Nishi are included in “Other” because the hotel operators did
not provide consent to disclose hotel-specific data.
 Retail: JPY 28 million of rental income from retail tenants at The OneFive Osaka
Sakaisuji, Hotel Wing International Kobe Shin Nagata Ekimae, and Smile HotelTokyo Asagaya, and from banquet rooms at Nest Hotel Kumamoto.

OperatingExpenses

 Depreciation: JPY 351 million. Depreciation has been calculated using thestraight-line method.
 Property and city planning taxes: JPY 119 million
 Building maintenance and repair expenses are based on what Ichigo Investment
Advisors, the asset management company of Ichigo Hotel, estimates will benecessary for each hotel during the period. However, actual expenses for theperiod could differ significantly from these forecast amounts for reasons including
the variability of maintenance and repair expenses, one-time costs due to
unexpected building damage, etc.
 Rental expenses, Ichigo Hotel’s principal operating expense (other thandepreciation, see above), are calculated based on historical data adjusted for
anticipated expense variations.
 Actual operating expenses may differ significantly from these assumptions due tounforeseeable factors.
 SG&A expenses: JPY 1.3 million for engineering report costs and JPY 0.5 million
for environmental certification costs.

Non-OperatingExpenses

 Interest expenses and other borrowing-related expenses: JPY 206 million

Borrowings

 Total borrowings: JPY 26.34 billion as of July 31, 2022 based on the assumptionthat JPY 450 million of long-term borrowing due February 28, 2022 will berefinanced.

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Number ofShares 254,974 shares issued and outstanding as of March 17, 2022. The forecast
assumes there will be no additional new issuance of shares and/or cancellation ofshares through July 31, 2022.

Dividend The dividend forecast assumes that dividends will comply with the dividend
distribution policy stipulated in Ichigo Hotel’s Articles of Incorporation.
 The dividend is subject to change due to factors such as sales of portfolio assets,changes in rental income associated with operator turnover, the occurrence of
unexpected maintenance and repair costs, and fluctuations in interest rates.

Dividend in
Excess ofEarnings

 Ichigo Hotel does not plan on paying any Dividend in Excess of Earnings.

Other This forecast assumes that there are no material revisions to laws and regulations,the tax system, accounting standards, listing rules of the Tokyo Stock Exchange,
and rules of the Investment Trusts Association, Japan, and no material changes inthe state of the economy and real estate market conditions.
 Given ongoing Covid uncertainty, these earnings forecasts are subject to change.

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