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.

May 25, 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

Hotel Acquisition (Comfort Hotel Nagano)
Ichigo Hotel decided today to acquire the Comfort Hotel Nagano in Nagano Prefecture.
1. Acquisition Summary
Hotel Name

Comfort Hotel Nagano

Hotel Number1

B-2 027

Hotel Type

Lodging-focused

Date Built

August 1992

Form of Ownership

Trust beneficiary interest in real estate (juekiken)

Appraisal Value2

JPY 700,000,000

Acquisition Price3

JPY 670,000,000

Seller4

MIRAI Corporation

Contract Date

May 25, 2022

Closing Date

May 31, 2022

Financing Method

Cash-on-handSettlement MethodLump-sum payment

1

The initial letter “B” is Ichigo Hotel’s region code for where the hotel is located, in
this case Kanto. Please see page 9 for region code details.
2
Appraisal Value is calculated by Tanizawa Sogo Appraisal as of May 1, 2022, and is incompliance with the appraisal guidelines of Ichigo Investment Advisors (“IIA”) as
well as the rules of the Investment Trusts Association of Japan.
3
Acquisition Price excludes incidental expenses such as fees and property, city
planning, and consumption taxes.

12. Acquisition RationaleIchigo Hotel continues to execute on its strategy to build a stable portfolio and drive
shareholder value. As part of this strategy, Ichigo Hotel decided to acquire the Comfort
Hotel Nagano, a lodging-focused hotel in Nagano City, an area with stable business andleisure demand.
The Comfort Hotel Nagano is a three-minute walk from Nagano Station on the JR
Hokuriku Shinkansen, which originally connected Tokyo and Nagano, and wasextended to Kanazawa in 2015. The area surrounding Nagano Station, Nagano
Prefecture’s largest rail hub, is an area with stable business demand as the home togovernment buildings such as the Nagano Prefectural Government Building and officesof large companies. Known as a temple town of Zenkoji Temple, Nagano City also has
stable leisure demand, offering convenient access to popular tourist spots such as
Kawanakajima Battleground and the Matsumoto and Ueda areas as well as sporting
events within Nagano Prefecture.
Ichigo Hotel will acquire the hotel using proceeds from a January 2020 hotel sale andcash-on-hand.
Ichigo Hotel has a fixed-rent lease with the hotel’s operator, which will drive further
earnings growth and geographic diversification. Today’s acquisition is forecast to drive
earnings upside at contract renewals and increase Ichigo Hotel’s annual NOI by JPY 43million.

2

3. Description and Location of the Comfort Hotel Nagano
The Comfort Hotel Nagano is a lodging-focused hotel located within a three-minute
walk from Nagano Station on the JR Hokuriku Shinkansen and Shinetsu Main Line.
The area near Nagano Station is home to government buildings and offices and offers
convenient access to tourist spots such as Zenkoji Temple and sporting events, thus
attracting both business and leisure demand.
The hotel’s single-bed rooms and twin-bed rooms allow it to flexibly accommodate thediverse needs of travelers.

3Legal Form of Asset
Trustee
Period of Trust Contract
Location
Property RightAreaLandZoningCoverage Ratio
Floor Area Ratio
Property Right
Use
Building Structure1
Total Floor Area
Date Built
Appraiser
Appraisal Value
Appraisal Date
Value by Direct Capitalization
MethodNumber of Guest Rooms
Architect2
Builder2
Structural Designer2
Inspection Agency2
PML (Assessor)
Collateral
Tenant Overview
Number of Tenants
Rental Income
Deposit
Leasable Area
Leased AreaOccupancy

Hotel Details
Trust beneficiary interest in real estate (juekiken)
Sumitomo Mitsui Trust Bank, Limited
June 30, 2017 – May 31, 2032 (Expected)
1-12-4 Minami Chitose, Nagano City, Nagano
Freehold
396.28m2
Commercial
80%500%
Freehold
Hotel
Steel 8F
1,921.45m2
August 14, 1992
Tanizawa Sogo Appraisal Co., Ltd.
JPY 700,000,000
May 1, 2022
JPY 728,000,00076Archi Plan
Moriya Shokai Co., Ltd.
Sekita Kozo Sekkei
Nagano City
0.6% (Sompo Risk Management Inc.)
NoneLease Details
1The hotel operator did not provide consent to disclose leasedetails. Ichigo Hotel has a fixed-rent lease with the operator.
Lease deposit: JPY 14,093,273. No guarantee deposit.
1,921.45m2
1,921.45m2
DecemberJanuary
February
MarchApril
2021
2022
2022
2022
2022
100%
100%
100%
100%100%

4

Property Management
Company
Master Lease Company
Master Lease TypeAppraisal NOI Yield4
Post-Depreciation NOI Yield5

Marimo Co., Ltd.
––
6.5%
4.9%
Special Items

An engineering report indicates the following issues with the building. The seller has agreed torectify them at the seller’s expense by the acquisition date.
1. A ventilator fuse blockage in the eighth-floor elevator machine room is limiting ventilation.
2. The smoke exhaust window of the first-floor restaurant is ruptured.
3. A January 2022 fire equipment inspection report indicates the emergency broadcasting
system has faulty emergency power supply, amp unit, and wiring.
1

Building Structure refers to the structure described in the real estate registry.
Names of the architect, builder, structural designer, and inspection agency are those as ofwhen the building was built.
3
Rental Income includes all rent from hotel facilities.
4Appraisal NOI Yield = Appraisal NOI (Net Operating Income) in the real estate appraisal
report divided by the Acquisition Price. This figure is independently calculated by IIA
based upon the above data and is therefore not in the real estate appraisal report itself.
5
Post-Depreciation NOI Yield = Appraisal NOI in the real estate appraisal report minus
Depreciation, divided by the Acquisition Price. Depreciation is independently calculated
by IIA using the straight-line method, and the Post-Depreciation NOI Yield is calculated
by IIA based upon the above data and are therefore not in the real estate appraisal report
itself.
25Hotel Name
Appraisal Value
Appraiser
Appraisal Date

Appraisal Value
Value by Direct
Capitalization Method
IncomeMaximum
Obtainable Rental
IncomeVacancy Loss
Expenses
Administrative &MaintenanceExpensesUtility Expenses
Repair Expenses
PM FeeLeasing
Brokerage Fees
Taxes
Insurance
Premiums
Other Expenses
Net Operating
Income (NOI)
Income on
Investment ofDeposits Received
CapitalExpenditure
FF&E Reserve
Net Profit

Appraisal Details
Comfort Hotel Nagano
JPY 700,000,000
Tanizawa Sogo Appraisal Co., Ltd.
May 1, 2022
AmountNote
Calculated using an income approach,with a DCF valuation as a basis and
JPY 700,000,000
verified using a direct capitalization
valuation
JPY 728,000,000
Income based on income and
JPY 49,884,456 expenditure forecast and reference tosimilar assets
JPY 49,884,456–
JPY 6,303,999– Borne by tenant– Borne by tenant
Based on engineering reports and
JPY 2,585,000
reference to similar assets
JPY 960,000 Based on estimates–
JPY 2,533,300

Based on FY2021 actual amounts(including depreciable asset tax)

JPY 125,930 Based on insurance estimates
JPY 99,769 Based on reference to similar assets
JPY 43,580,457–
JPY 5,640,000

Based on engineering reports andreference to similar assets

JPY 2,280,000

Based on an analysis of repair expenses
and capital expenditure

JPY 35,660,457
Based on transactions of similar assets
while taking into account the asset’s
4.9% location and specific characteristics,
rights, and terms and conditions of thecontract

Cap Rate

6

Value via DCF Method

JPY 688,000,000

Discount Rate

Based on yields of similar assets andfinancial assets, while taking into
5.0%
account the asset’s location and specificcharacteristics

Terminal Cap Rate

5.1% Cap rate adjusted for uncertainties

Value via Cost Approach
Ratio of Land

JPY 625,000,000
68.4%

Ratio of Building

31.6%

Building value divided by the sum ofbuilding and land values

Notes
None
4. Seller Profile
Name
Address
Representative
CapitalEstablishment Date
Net Assets
Total Assets
Major Shareholder
and Shareholding
Ratio(as of October 31,2021)
Principal Business
Relationship withIchigo Hotel or IIAMIRAI Corporation
3-2-1 Nishi Kanda, Chiyoda-ku, Tokyo
Executive Director Michio Suganuma
JPY 73,516 million (as of October 31, 2021)
December 4, 2015
JPY 75,308 million (as of October 31, 2021)
JPY 161,226 million (as of October 31, 2021)
The Master Trust Bank of Japan, Ltd. (Trust Account)
Custody Bank of Japan, Ltd. (Trust Account)
The Nomura Trust and Banking Co., Ltd. (Trust Account)
Custody Bank of Japan, Ltd. (Security Investment
Trust Account)
SMBC Nikko Securities Inc.
Real estate investment and asset management

13.4%
10.6%
4.4%
3.8%
2.3%

The seller does not have any capital, personnel, or business
relationship of note with Ichigo Hotel or IIA. In addition, the seller is
not a related party as defined in the Enforcement Ordinance of theInvestment Trust and Investment Corporation Law or the internal
rules of IIA.

5. Ownership History
The seller of the Comfort Hotel Nagano is not a related party.

7

6. Broker Profile
Name

The broker did not provide consent to disclose its name.

Relationship withIchigo Hotel or IIA

The broker does not have any material capital, personnel,or transactional relationship with Ichigo Hotel or IIA. Inaddition, the broker is not a related party as defined in theEnforcement Ordinance of the Investment Trust andInvestment Corporation Law or the internal rules of IIA.

Broker Fee

The broker did not provide consent to disclose the fee.

7. Acquisition Schedule
Ichigo Hotel Board Resolution Date
Contract Date
Acquisition and Settlement Date

May 25, 2022
May 25, 2022
May 31, 2022 (Expected)

8. Earnings Impact
The impact of the acquisition of the Comfort Hotel Nagano on Ichigo Hotel’s July 2022
and January 2023 earnings forecasts announced on March 17, 2022 is minimal, andtherefore, the forecasts are unchanged. Should an earnings forecast revision become
necessary, Ichigo Hotel will promptly disclose the details.
Appendix A: Engineering Report Summary
Inspector Name
Inspection Date
Short-Term Repair Expenses1
Long-Term Repair Expenses2
Current Replacement Cost

Tokio Marine dR Co., Ltd.
April 2022–
JPY 106,572,000
JPY 469,160,000

1

Short-Term Repair Expenses are defined as repair expenses considered necessary
beyond the scope of ordinary maintenance within a year from the time of inspection.
2Long-Term Repair Expenses are defined as cumulative repair expenses considerednecessary for the maintenance of the hotel within twelve years from the time ofinspection.

8Appendix B: Post-Acquisition Portfolio
HotelNo.1

Hotel Name

A-1 004
A-2 008
A-3 018B-1 020B-2 027
C-1 012
C-3 016
C-4 025
D-1 006
D-2 003
D-3 011
D-4 019E-1 001E-3 005
E-4 007
E-5 010F-1 017
F-2 015
F-3 021F-4 022
F-5 024
F-6 026
G-1 009
G-3 023
1Prefecture

Hokkaido
Nest Hotel Sapporo Ekimae
Hokkaido
Nest Hotel Sapporo Odori
Hokkaido
Comfort Hotel Kushiro
KanagawaCapsule Plus Yokohama
NaganoComfort Hotel Nagano
Tokyo
Smile Hotel Tokyo Asagaya
Hotel Livemax NihombashiTokyo
HakozakiTokyo
HOTEL EMIT SHIBUYA
Shizuoka
Comfort Hotel Hamamatsu
Hotel Wing International
Aichi
NagoyaComfort Hotel Central
Aichi
International Airport
Mie
Comfort Hotel Suzuka
Kyoto
Smile Hotel Kyoto Shijo
The OneFive Osaka
Osaka
Sakaisuji
Hotel Wing International
Hyogo
Kobe Shin Nagata Ekimae
Nest Hotel Osaka
Osaka
Shinsaibashi
Okayama
The OneFive Okayama
Ehime
Nest Hotel Matsuyama
Urbain Hiroshima Executive Hiroshima
The OneFive GardenOkayama
Kurashiki
Hiroshima
Valie Hotel Hiroshima
Washington Hotel Plaza
Yamaguchi
Shimonoseki Eki Nishi
The OneFive Fukuoka
FukuokaTenjinKumamoto
Nest Hotel Kumamoto
Total 24 Hotels

Fixed Rent
Variable Rent
Fixed Rent
Variable Rent

Acquisition
Price2(JPY million)
2,160
1,450
300
1,490
670
3,910

Fixed Rent

1,360

2.6

Variable Rent
Fixed Rent

3,700
1,550

7.0
2.9

Variable Rent

2,670

5.1

Fixed Rent

5,308

10.1

Fixed Rent
Variable Rent

300
4,480

0.6
8.5

Variable Rent

1,630

3.1

Variable Rent

1,490

2.8

Variable Rent

7,600

14.5

Variable Rent
Variable Rent
Fixed Rent

1,200
1,610
1,800

2.3
3.1
3.4

Variable Rent

1,725

3.3

Variable Rent

1,500

2.9

Fixed Rent

1,080

2.1

Variable Rent

1,380

2.6

Variable Rent

2,220
52,583

4.2
100

Lease
Terms
Variable Rent
Variable Rent

% ofPortfolio3

The initial letter (A, B, etc.) is a region code which identifies the area in which the hotel is located.

CodeARegion
Hokkaido/Tohoku

B

KantoCDE

Tokyo
Hokuriku/TokaiKinki

Prefectures
Hokkaido, Aomori, Iwate, Miyagi, Akita, Yamagata, FukushimaIbaraki, Tochigi, Gunma, Saitama, Chiba, Kanagawa, Yamanashi,Nagano, Niigata
TokyoToyama, Ishikawa, Fukui, Gifu, Shizuoka, Aichi, MieOsaka, Hyogo, Kyoto, Shiga, Nara, Wakayama
94.1
2.8
0.6
2.8
1.3
7.4

F

Chugoku/Shikoku

G

Kyushu/Okinawa

Tottori, Shimane, Okayama, Hiroshima, Yamaguchi, Kagawa,Tokushima, Kochi, Ehime
Fukuoka, Saga, Nagasaki, Kumamoto, Oita, Miyazaki, Kagoshima,
Okinawa

2Acquisition Price is the price as indicated in the purchase and sales agreement for the hotel(excluding fees and incidental expenses such as property, city planning, and consumption taxes).
3% of Portfolio is the Acquisition Price of each hotel as a percentage of the Total Acquisition Pricefor the portfolio, rounded to the nearest tenth.

10