Translation

This is an English language translation of the original Japanese announcement on our Website released on August 22, 2017.
However, no assurance or warranties are given with respect to the accuracy or completeness of this English language translation.
The Japanese original shall prevail in the case of any discrepancies between this translation and the Japanese original.

Summary of Financial Results (REIT)
for the Fiscal Period Ended June 30, 2017
August 22, 2017
Name of Issuer:

Invincible Investment Corporation

Stock Exchange Listing: Tokyo Stock Exchange

Securities Code:

8963

URL

Representative:
Name of Asset Manager:
Representative:
Contact:

Naoki Fukuda, Executive Director
Consonant Investment Management Co., Ltd.
Naoki Fukuda, President & CEO
Jun Komo, General Manager of Planning Department

http://www.invincible-inv.co.jp/

TEL. +81-3-5411-2731

Scheduled Date of
Scheduled Date of Filing of
Securities Report:

Commencement for
September 28, 2017

Supplementary Materials for
Financial Results:

Yes

Presentation Meeting:Yes (for analysts and investors)

Distribution Payments:

September 26, 2017

1.

(values are rounded down to the nearest JPY million)
Financial Results for the Fiscal Period ended June 30, 2017 (from January 1, 2017 to June 30, 2017)(1)

Operating Results(Percentages indicate percentage change from the preceding period)
Operating Revenues

Fiscal period ended
June 30, 2017

JPY million

Fiscal period ended
December 31, 2016%

Operating Income

Ordinary Income

JPY million%

Net Income

JPY million%

JPY million

%

9,260

(2.6)

5,344

(9.9)

4,702

(13.4)

4,702(13.4)

9,511

16.6

5,934

17.0

5,431

24.5

5,431

24.5

Net Income per Unit

Ordinary Income /Total Assets

Net Income /Unitholders’ Equity

Ordinary Income /Operating Revenues

Fiscal period ended
June 30, 2017

JPY

%

%

%

1,241

3.5

1.6

50.8

Fiscal period ended
December 31, 2016

1,477

4.2

1.9

57.1

(Note)(2)“Net Income per Unit” is calculated based on the average number of investment units during the period and is rounded to the nearest yen. Net
income per unit calculated based on the number of investment units issued and outstanding at the end of the fiscal period ended June 30, 2017
(3,860,824 units) and rounded down to the nearest yen is JPY 1,217.

Distributions
Distribution(Excluding excess profit
distribution)

Per Unit

Total

Distribution

Excess Profit
Distribution
Per Unit

Dividend
PayoutRatio(Including excess profit
distribution)

Total

Per Unit

Total

Distribution/ Net
AssetsFiscal period ended
June 30, 2017

JPY

JPY million

JPY

JPY million

JPY

JPY million

%

%

1,243

4,799

21

81

1,264

4,880

102.1

3.5

Fiscal period ended
December 31, 2016

1,477

5,429

0

0

1,477

5,429

100.0

4.2

(Note 1)
(Note 2)
(Note 3)(Note 4)

(3)

Distribution (excluding excess profit) differs from net income for the fiscal period ended June 2017, since INV distributes almost all of the
profit as defined in Article 136, Paragraph 1 of the Investment Trust and Investment Corporation Act, which includes deferred gain on hedge ofthe interest rate swap.
The distribution in excess of profit for the fiscal period ended June 30, 2017 is JPY 81 million, of which JPY 46 million (JPY 12 per unit) isthe allowance for temporary differences adjustment arising from different rules and practices in tax and accounting and JPY 34 million (JPY 9
per unit) is the refund of investment for the purpose of stabilizing distributions.
The “Dividend Payout Ratio” is calculated in accordance with the following formula:
Dividend Payout Ratio = Distribution Amount (Excluding excess profit distribution) ÷ Net Income × 100“Dividend Payout Ratio” is rounded to the nearest one decimal place.
“Distribution/ Net Assets” is calculated based on the figures excluding excess profit distribution.

Financial Position
Total Assets

Fiscal period ended
June 30, 2017
Fiscal period ended
December 31, 2016
(Note)Net Assets

Net Assets / Total Assets

Net Assets per Unit

JPY million

JPY million%

JPY

306,421139,06245.4

36,019277,361

131,455

47.4

35,762“Net Assets per Unit” is calculated based on the number of investment units issued and outstanding at the end of each period, and is rounded to thenearest yen.

2

(4)

Cash Flows
Cash Flows fromOperating Activities

Fiscal period ended
June 30, 2017

Cash Flows from
Financing Activities

Closing Balance ofCash and Cash Equivalents

JPY million

JPY million

JPY million

JPY million

6,830(35,704)

24,257

9,598

9,818

(8,457)(3,910)14,214

Fiscal period ended
December 31, 2016

2.

Cash Flows from
Investing Activities

Forecast for the Fiscal Period ending December 31, 2017 (from July 1, 2017 to December 31, 2017)

Operating
Revenues
Fiscal period
endingDecember 31,
2017

Operating
Income(Percentages indicate percentage change from the preceding period)
Distribution
Distribution
per Unit
per Unit
Excess Profit
Ordinary(including(excluding
Net Income
Distribution
Incomeper Unit
excess profit
excess profit
distribution)
distribution)

JPY
million%JPY
million%JPY
million%JPY
million%

10,781(16.4)

6,512(21.8)

5,885(25.1)

5,884(25.1)

JPY

JPY

JPY

1,524

21

1,545

(Reference) Estimated net income per unit for the fiscal period ending December 31, 2017 is JPY 1,524.

* Others(1) Changes in Accounting Policies, Accounting Estimates or Restatements(a) Changes in Accounting Policies due to Revisions to
Accounting Standards and Other Regulations

None(b) Changes in Accounting Policies due to Other Reasons(c) Changes in Accounting Estimates(d) Restatements

None
None
None

(2) Number of Investment Units Issued and Outstanding(a) Number of Units Issued and Outstanding as of the
End of the Fiscal Period (Including Treasury Units)

June 30, 2017

3,860,824

December 31, 2016

3,675,824(b) Number of Treasury Units as of the End of the Fiscal Period

June 30, 2017

0

December 31, 2016

0(Note)

Please refer to “Notes Related to Per Unit Information” on page 43 regarding the number of investment units which is the basis for the
calculation of net income per unit.

3ͤThe Implementation Status of Statutory Audit
At the time of this financial report, the audit procedures for the financial statements pursuant to the Financial Instruments andExchange Act are yet to be completed.
ͤExplanation on the Appropriate Use of the Forecast of Results and Other Matters of Special Consideration(Explanation on the Appropriate Use of the Forecast of Results)
The forward-looking statements in this financial report are based on the information currently available to us and certain
assumptions which we believe are reasonable. Actual operating performance may differ significantly due to factors we cannot
predict as of this date, including gains or losses from the disposition of properties, repayment of borrowings, decreases in rents
and changes in operating conditions. Further, there is no guarantee of the payment of the forecast distribution amount.
Please refer to “Assumptions Underlying the Forecast of Financial Results and Distribution for the Fiscal Period ending
December 31, 2017 (from July 1, 2017 to December 31, 2017),” on page 17 for assumptions used in the forecasts andprecautions regarding the use of such forecasts.
Unless otherwise specified herein, amounts less than JPY 1 are rounded down, and ratios are rounded to the nearest one
decimal place.

41. Related Companies of the Investment Corporation
Disclosure is omitted because there have been no material changes in the “Structure of the Investment Corporation”
section of the latest securities report (filed on March 27, 2017).

2. Management Policy and Operating Conditions(1) Management Policy
Disclosure of “Investment Policies,” “Investment Targets,” “Distribution Policies” and the “Investment Restriction” isomitted because there have been no material changes from the relevant sections of the latest securities report (filed on
March 27, 2017)(2) Operating Conditionsa

Overview of the Fiscal Period Ended June 2017 (“Reporting Period”)(a)Main Trends of INV

INV was established in January 2002 in accordance with the Investment Trust and Investment Corporation Act (Act No.
198 of 1951, as amended; the “Investment Trust Act”). In May 2004, INV was listed on the Osaka Securities Exchange(application for delisting was made in August 2007), and in August 2006 was listed on the Real Estate Investment andTrust Securities Section of the Tokyo Stock Exchange (Ticker Code: 8963).
After the absorption-type merger with LCP Investment Corporation (“LCP”) was implemented on February 1, 2010, as
specified in Article 147 of the Investment Trust Act, with LCP as the absorbed corporation, INV issued new investment
units through a third-party allotment on July 29, 2011 and refinanced its debt. Calliope Godo Kaisha (“Calliope”), an
affiliate of the Fortress Investment Group LLC (“FIG” and together with Calliope and other affiliates of FIG,
collectively the “Fortress Group”) was the main allottee, and the sponsor changed to the Fortress Group.
Ever since the commencement of sponsorship from the Fortress Group, INV has been focusing its efforts on improving
the profitability of its portfolio and establishing a revenue base in order to secure stable distributions, and has
strengthened the lender formation through new borrowings and the refinancing of existing bank borrowings, thereby
creating a financial base for external growth. With this platform as a base, in June 2014, Consonant Investment
Management Co., Ltd., the asset manager to which INV entrusts the management of its assets (the “Asset Manager”)
revised the Investment Guidelines for INV, and positioned hotels as a core asset class alongside residential properties
with a view towards expanding investments in the hotel sector in which demand is forecasted to rise going forward. As aresult of the external growth efforts, INV's portfolio at the end of the previous period ended December 2016 comprisedof 124 properties (48 hotels, 68 residential properties and eight others) with a total acquisition price of JPY 266,619
million. The acquisition price of the portfolio has increased a significant 3.7x, compared to the period as of May 22,
2014, which is the period immediately prior to INV’s initial investment in hotels.
In the Reporting Period, INV determined an issuance of new investment units (the “Public Offering”) and secondaryoffering on February 22, 2017 in order to acquire two residential properties on March 14, 2017 with funds raised
through the Public Offering and new borrowings. One of the two residential properties, Royal Parks Tower
Minami-Senju, is now the largest residential asset and second largest asset in the portfolio. INV believes that Royal
Parks Tower Minami-Senju has upside in NOI growth through INV’s rent increase program, which has the steady recent
track record, and that the transaction added both stability and upside to the portfolio.
In addition, INV acquired Hotel MyStays Premier Hamamatsucho utilizing cash on hand and a new loan on May 29,
2017. The hotel is one of MyStays’ five Premier hotels (Note 1) and has 120 large rooms with a room size of 28.5 m2 to
comfortably accommodate three to five guests, as well as 14 serviced apartment units. As a result, INV's portfolio
comprised of 127 properties (49 hotels, 70 residential properties and eight others) with a total acquisition price of JPY
299,181 million at the end of the Reporting Period.
Moreover, after the Reporting Period, INV announced a portfolio rebalance, including the future acquisition of
additional 49 rooms at Hotel MyStays Gotanda Station at an estimated 7.3% NOI cap rate and the sale of two non-core
assets at a 3.8% NOI cap rate, which improves the overall NOI yield of the portfolio (see “2 (2) b Outlook for the Fiscal
Period Ending December 31, 2017” and “c. Significant Subsequent Events” below for the detail of the portfolio
rebalance).
5

The sale of the two non-core assets closed on July 31, 2017 and the acquisition of the additional rooms is expected to becompleted on October 31, 2017 after the satisfactory completion of office space to hotel room conversion.
INV has signed a Memorandum of Understanding (the “MOU”) with affiliates of Fortress Group with respect topreferential negotiating rights regarding the acquisition of hotels and residential properties, which will continue toprovide INV with considerable opportunities for external growth. As of the end of the Reporting Period, there are 21
hotels (6,007 rooms) and nine residential properties (743 units) in the MOU.
(Note 1)(b)

Five Premier hotels are Hotel MyStays Premier Akasaka, Hotel MyStays Premier Omori, Hotel MyStays
Premier Sapporo Park, Hotel MyStays Premier Kanazawa and Hotel MyStays Premier Hamamatsucho, of
which INV owns Hotel MyStays Premier Kanazawa and Hotel MyStays Premier Hamamatsucho.

Operational Environment and Performance

For the June 2017 period, the portfolio NOI increased by 12.4% or JPY 886 million to JPY 8,023 million compared tothe same period in the previous year (the June 2016 period), with a 5.4% increase from the hotel portfolio and a 6.8%
increase from the residential portfolio.
In addition, the portfolio maintained a high average occupancy rate (Note 1) of 97.9%. Commentary on hotel andresidential performance in the first half of 2017 is described below.
The NOI at the 40 hotels owned by INV (Note 2) increased by 1.8% for the period compared to the same period in theprevious year, with a strong showing for the second quarter (from April 2017 to June 2017). The NOI for the second
quarter rebounded, gaining 5.0% compared to the same period in the previous year, after declining 1.8% in the firstquarter (from January 2017 to March 2017). The 40 hotels recorded an occupancy rate (Note 3) of 89.0% (-0.8 points
YoY), ADR (Note 4) of JPY 9,345 (+0.7% YoY), and RevPAR (Note 5) of JPY 8,320 (-0.2% YoY). The overseas sales
ratio (Note 6) at the 38 hotels (Note 7) increased to 33.1% (+4.9 points YoY). Of the total hotel revenue, fixed rents
accounted for 47.1% (JPY 2,613 million) and variable rents accounted for 52.9% JPY 2,932 million at the 49 hotels.
Inbound visitors reached a record high of 24.0 million (+21.8% YoY) in 2016 and the increasing trend continues in 2017(+17.4% YoY as of June, 2017) while government targets are 40 million in 2020 and 60 million in 2030. Japan’s GDP
has achieved continuous growth with positive signs in consumer confidence, improvement of domestic employment, as
well as wage increase. The hotel segment has been impacted by an increase in supply, however the continued growth ininbound visitors to Japan is much higher than the supply in new hotel rooms. Cancelations of hotel rooms are also a
concern, but MyStays Hotel Management Co., Ltd. (“MHM”), a hotel operator in the sponsor group, has increased thelevel of overbookings to help mitigate this issue. Under these circumstances, INV is working closely with the operatorsof the hotels, primarily MHM, to proactively address the issues at hand. Specifically, MHM is taking various actions
based on extensive operational analysis and customer feedback through TrustYou (Note 8) Analytics to improve thecustomer experience. MHM expects to increase direct bookings and maximize revenue at time of high demand throughpromotional campaigns, an improved website and enhanced revenue management analytics. MHM is also focused on
the following initiatives such as increasing overbooking ratios strategically in order to offset cancelations, converting a
select number of smoking rooms to non-smoking to generate higher ADRs for non-smoking rooms, saving cost for linen
and cleaning, increasing services for Chinese speaking guests, and strengthening relations with travel agents, airlines
and OTAs (online travel agents) based in China, Hong Kong , Taiwan and Korea to diversify and improve distribution
channel. INV believes that these initiatives, along with the continued growth in inbound visitors to Japan will help
increase portfolio NOI.
In addition, INV decided to change the hotel operator for one hotel (Note 9) on June 26, 2017.
The NOI (Note 10) of the 70 residential properties (Note 11) increased 2.4% compared to the same period in theprevious year, and the average occupancy rate achieved a stable 95.2%, a decrease of 0.9 points compared to the same
period in the previous year.
As a continued focus on proactive asset management INV changed the master lessee (“ML”) and property manager(“PM”) for one residential property on April 27, 2017 (Note 12) in order to further improve its operational efficiency
and property performance. In addition, INV decided on June 26, 2017 to change ML/PM for four residential properties(Note 13) aiming to increase NOI by JPY 39 million per year on an estimated basis. The change of ML/PM at the four
residential properties was determined after the acquisition of Royal Parks Tower Minami-Senju, a flagship residential
asset where the role of the property manager is highly sought after. INV was therefore able to negotiate this assignment
to reduce the rate of property management fees at the property from 2.7% to 1.5% for Royal Parks Tower Minami-Senju,
6

as well as improve the economics at Royal Parks Seasir Minami-Senju and Royal Parks Momozaka. As a result, thenumber of ML/PM was consolidated from 10 to nine for 70 residential portfolio.
Trends for rent at city-center residential properties with small-type rooms maintain a moderate increase. Under the
positive circumstances in the macro environment, INV continues to focus on its rent increase program for new leases
and renewals as well as initiatives to reduce residential leasing costs based on a market analysis of each unit andproperty. In the Reporting Period, INV realized a rent increase for 61.6% (based on the number of contracts) of the newresidential lease contracts for an average rent increase of 3.2% compared to the previous rent across all new leases (Note14). Specifically, at Royal Parks Tower Minami-Senju, which was acquired during the Reporting Period, INV achieved
strong results with a rent increase for 97.6% (based on the number of contracts) of the new lease contracts with anaverage rent increase of 12.7% compared to the previous rent across all new leases (Note 14).
INV achieved a rent increase for 51.2% (based on the number of contracts) of contract renewals for an average rent
increase of 2.1% compared to the previous rent across all renewal leases (Note 14), while maintaining a high contract
renewal rate of 81.0% (Note 15). There was a notable increase in rent in the Sendai, Saitama, Kyoto, Osaka and Hyogo
areas, which achieved a rent increase for 47.6% (based on the number of contracts) of renewal contracts for an averagerent increase of 1.9% compared to the previous rent (Note 14) across all renewal leases in these areas, even though theseareas did not achieve rent increases for contract renewals in the previous year. These areas particularly benefited fromthe change of ML/PM for 16 residential properties in December 2016 and one residential property in January 2017.
The total appraisal value of 127 properties at the end of the Reporting Period was JPY 363,502 million. The portfolio
has an unrealized gain of JPY 70,964 million (Note 16) and an unrealized gain ratio of 24.3% (Note 16). Due to theinternal growth and trends in the real estate investment and rental market, the total appraisal value of 124 properties,
which were owned as of the end of December 2016 period, increased by 0.6% from JPY 328,192 million at the end of
December 2016 period to JPY 330,102 million at the end of the Reporting Period.
Key Performance Indicators of 40 Hotel Properties (Note 2)
Occupancy Rate
ADR (JPY)
RevPAR (JPY)GOP (JPY million) (Note 17)

June 2017 fiscal period
89.0%
9,345
8,320
5,365

Year-on-year change-0.8pt
+0.7%
-0.2%
+1.6%

Key Performance Indicators of 70 Residential Properties (Note 11)
Occupancy Rate (Note 1)
Average Rent per Tsubo per Month(JPY) (Note 18)
NOI (JPY million) (Note 10)

June 2017 fiscal period
95.2%

Year-on-year change-0.9pt

9,595

+1.6%

2,597

+2.4%

(Note 1)

“Occupancy Rate” for the entire portfolio and for the residential properties is calculated by dividing the sumof total leased area by the sum of total leasable area at the end of each month during the relevant period.

(Note 2)Of the 49 acquired hotels, the following nine hotels with fixed-rent lease agreements are excluded: Super
Hotel Shinbashi/ Karasumoriguchi, Comfort Hotel Toyama, Super Hotel Tokyo-JR Tachikawa Kitaguchi,
Super Hotel JR Ueno-iriyaguchi, Comfort Hotel Kurosaki, Comfort Hotel Maebashi, Comfort Hotel
Tsubame-Sanjo, Comfort Hotel Kitami and Takamatsu Tokyu REI Hotel. The figures assume that all
properties acquired in and after 2016 by INV had been owned since January 1, 2016. The actual results before
acquisition by INV are based on the data provided by the sellers.

(Note 3)

“Occupancy rate” for the hotel properties is calculated in accordance with the following formula:
Occupancy rate = total number of occupied rooms during a certain period ÷ total number of rooms available
during the same period (number of rooms x number of days)
Hereinafter the same shall apply.

(Note 4)“ADR” means average daily rate, and is calculated by dividing total room sales (excluding service fees) for acertain period by the total number of days per room for which each room was occupied during the same period.
Hereinafter the same shall apply.
7

(Note 5)“RevPAR” means revenues per available room per day, and is calculated by dividing total room sales for acertain period by total number of rooms available (number of rooms x number of days) during the same period,and is the same as the figure obtained by multiplying ADR by occupancy rates. Hereinafter the same shallapply.

(Note 6)

“Overseas sales ratio” is the ratio of sales amount through overseas web agents to revenues.

(Note 7)Of the 49 acquired hotels, 11 hotels, APA Hotel Yokohama-Kannai, Super Hotel Shinbashi/ Karasumoriguchi,
Comfort Hotel Toyama, Super Hotel Tokyo-JR Tachikawa Kitaguchi, Super Hotel JR Ueno-iriyaguchi,
Comfort Hotel Kurosaki, Comfort Hotel Maebashi, Comfort Hotel Tsubame-Sanjo, Comfort Hotel Kitami and
Takamatsu Tokyu REI Hotel, the tenants of which do not disclose the overseas sales ratio; and Hotel MyStays
Kanda, which was not fully operating from May 20, 2016 through August 22, 2016 due to renovation in 2016,
are excluded. The figures assume that all hotels acquired in and after 2016 by INV had been owned since
January 1, 2016. The actual results before acquisition by INV are based on the data provided by the sellers.

(Note 8)“TrustYou” analyzes hundreds of millions of travel reviews and is one of the world’s largest guest feedback
platforms.

(Note 9)The operator of Hotel Vista Premio Dojima was changed to MHM on August 1, 2017. In connection with thechange, the property name was changed from Hotel Vista Premio Dojima to Hotel MyStays Dojima.

(Note 10) For the comparison of NOI of the 70 properties, insurance income and related repair expenses, which aretemporary items, are excluded.
(Note 11) The figures assume that all residential properties acquired in and after 2016 by INV had been owned since
January 1, 2016. The actual results before acquisition by INV are based on the data provided by the sellers.
(Note 12) ML and PM for Belle Face Ueno-Okachimachi were changed on May 1, 2017.
(Note 13) ML and PM for Royal Parks Shinden and Royal Parks Momozaka were changed on July 1, 2017 and August 1,
2017 respectively, and will be changed for both Royal Parks Tower Minami-Senju and Royal Parks Seasir
Minami-Senju on December 1, 2017.
(Note 14) Increase or decrease in the sum of monthly rents on new or renewal contracts, or the total of both, comparedwith the sum of previous rents.
(Note 15) Renewal rate is calculated by the number of renewed contracts during the relevant period divided by the
number of contracts due up for renewal during the relevant period(Note 16) The unrealized gain is calculated using the following formula: the appraisal value as of the end of theReporting Period - book value as of the end of the Reporting Period.
The unrealized gain ratio is calculated using the following formula: the unrealized gain ÷ book value as of theend of the Reporting Period.
(Note 17) “GOP” means the gross operating profit, and is the amount remaining after deducting costs of hotel operations(the personnel, utility and advertising expenses and other expenses) and the management services fee tooperators (if any) from the hotel’s revenues. Hereinafter the same shall apply.
(Note 18) “Average Rent per Tsubo per Month” is calculated by dividing the total rental revenue including common area
charges for each month by the sum of total leased area at the end of each month during the relevant period.
(c)Overview of Fund Raising
As a result of the measures described below, INV’s interest-bearing debt outstanding balance was JPY 163,990
million and the Interest-Bearing Debt ratio (Note 1) and LTV (Note 2) were 53.5% and 45.1% respectively, as ofthe end of the Reporting Period, with an average interest rate (Note 3) of 0.50%.

(i) Equity Finance
INV executed a Public Offering which closed on March 13, 2017 (number of new investment units issued: 185,000;
total issue value: JPY 8,393 million) in order to procure part of the funds for the acquisition of two residential
properties.

8

(ii) Debt FinanceIn tandem with the equity finance as described in (i) above, INV borrowed a new loan, New Syndicate Loan (G)(amount borrowed: JPY 11,250 million; interest rate: variable interest rate of 1-month JPY TIBOR plus 0.4%, 0.5%
and 0.6% for durations of three, four and five years), which was arranged by Mizuho Bank, Ltd., and Term Loan(F) (amount borrowed: JPY 3,000 million; interest rate: variable interest rate of 1-month JPY TIBOR plus 0.45%
for duration of three and a half years) on March 14, 2017 in order to pay a portion of the acquisition price andrelated expenses for the acquisition of two residential properties.
As a result of New Syndicate Loan (G), the number of INV’s lenders increased to 22, with The Towa Bank, Ltd.,The Dai-ichi Life Insurance Company, Limited and The Gunma Bank, Ltd. added to the bank formation.
INV also borrowed a new loan, Term Loan (G) (amount borrowed: JPY 7,321 million; interest rate: variableinterest rate of 1-month JPY TIBOR plus 0.55% for duration of four and a half years) from Mizuho Bank, Ltd. on
May 29, 2017 in order to pay a portion of the acquisition price and related expenses for the acquisition of one hotel.
(Note 1) Interest-Bearing Debt ratio uses the calculation formula below:
Interest-Bearing Debt ratio = total outstanding interest-bearing debt/total assets x 100(Note 2) LTV uses the calculation formula below:
LTV = total outstanding interest-bearing debt/total appraisal value x 100(Note 3) The average interest rate (annual rate) is calculated by the weighted average based on the outstandingbalance of borrowings and rounded to two decimal places.
(d)

Overview of Acquisition of Assets
The overview of two residential properties acquired on March 14, 2017 is as follows:

Use

Location

Acquisition
price(JPY million)(Note 1)

Appraisal
value(JPY million)(Note 2)

SellerRoyal Parks Tower
Minami-Senju

Arakawa-ku,
Tokyo

21,87922,100

Sakura Tokutei
Mokuteki Kaisha

Royal Parks Seasir
Minami-Senju

Arakawa-ku,
Tokyo

2,683

2,710

Momo Tokutei
Mokuteki Kaisha

24,562

24,810Property
number

Property name

A105

A106

Residential

Total

Categoryof specified
asset

Trust
beneficiaryinterest(Note 1) Acquisition price does not include property taxes, city planning taxes, national or local consumption taxes;
hereinafter the same.
(Note 2) The appraisal value is as of December 1, 2016 based on the appraisal reports by Japan Real Estate Institute.

The overview of one hotel acquired on May 29, 2017 is as follows:

Use

Hotel

Property
number

Property nameLocation

D49

Hotel MyStays
Premier
Hamamatsucho

Minato-ku,
TokyoAcquisition
price(JPY million)

8,000

Appraisal
value(JPY million)(Note 1)

SellerCategoryof specified
asset

8,090

Septentrio 2
Tokutei Mokuteki
KaishaTrust
BeneficiaryInterest(Note 1) The appraisal value is as of April 30, 2017 based on the appraisal report by Japan Real Estate Institute.

9

(e)

Overview of Results of Operations and Distributions

As a result of the operations mentioned above, operating revenues for the Reporting Period decreased by JPY 250
million from the previous period (-2.6%) to JPY 9,260 million, and net income decreased by JPY 728 million from theprevious period (-13.4%) to JPY 4,702 million. The distribution per unit (“DPU”) for the Reporting Period was JPY
1,264, a decrease of JPY 213 (-14.4%) compared to the previous period.
The majority of INV’s owned hotels use a variable rent scheme linked to performance of the relevant hotel. Hoteldemand is affected by seasonal factors and the December ending fiscal periods (from July to December) which include
summer holiday and autumn outing seasons tend to record higher revenue than the June ending fiscal periods (fromJanuary to June). Accordingly, INV’s rental revenues tend to be higher in the December ending fiscal periods than in theJune ending fiscal periods.
INV aims to include maximum profit distributions (excluding excess profit distribution) in deductible expenses inaccordance with Section 1 of Article 67-15 of the Act on Special Taxation Measures Law (Act No. 26 of 1957; asamended), and decided to distribute almost all of the profit as defined in Article 136, Paragraph 1 of the Investment
Trust Act, except for fractional distribution per unit less than JPY 1.
INV believes maintaining the stability of cash distributions over the medium term is one of the most important factors indetermining the amount of distribution for a given fiscal period, and therefore, INV has adopted the policy to make
distributions in excess of profits in order to stabilize distributions, in cases where dilution of investment units orsignificant expenses are to be recorded in connection with, among other things, the acquisition of assets or the raising of
capital, leading to a temporary decrease in distribution, taking into consideration the level of distribution per unit
assuming such acquisition of assets or capital raising had contributed for a full fiscal period. INV may also consider
making distributions in excess of profits for the purpose of mitigating the impact of corporate tax increase arising fromdifferent rules and practices in tax and accounting, such as treatment on depreciation of fixed term land lease or asset
retirement obligation.
With respect to the June 2017 period, INV intends to make distributions in excess of profits for JPY 46 million (JPY 12
per unit) in order to cope with the discrepancy between tax and accounting treatment for the June 2017 period. INV also
intends to make distributions in excess of profits for JPY 34 million (JPY 9 per unit) in order to stabilize distributions
since net income per unit decreases temporarily due to one-off expenses in connection with the Public Offering andborrowings in March 2017. As a result, the DPU (including excess profit distribution) for the June 2017 period is JPY
1,264.
b

Outlook for the Fiscal Period Ending December 31, 2017
The DPU (including excess profit distribution) for the December 2017 period is forecast to be JPY 1,545 (+4.6% YoY);
the full year DPU (including excess profit distribution) for calendar year 2017 is forecast to provide steady growth of
JPY 2,809 (+5.5% YoY).
Future operational policy and issues to be addressed
Since July 2011, INV has enhanced unitholder value by significantly increasing DPU and financial stability with theFortress Group as its sponsor. Going forward, INV will continue to implement various strategies to maintain further
growth and financial stability, including the following measures.
•••

Continuous acquisition of properties from large pipeline provided by the sponsor and third parties
Further internal growth at hotel and residential properties
Diversification of financing measures including the issuance of investment corporation bonds and extension
and diversification of loan maturities

10Details of the future growth strategy are as follows.
(i)

External growth strategy
New Property Acquisitions
As its basic strategy, INV will move forward with the acquisition of new properties focusing on hotels, wherecontinued growth in portfolio revenues is anticipated, and residential properties especially where rental growth canbe achieved. Rent revenue from residential assets and other assets as well as the fixed rent portion from hotels will
also contribute to more stable revenue, which was 69.7% of total revenue (Note 1). This acquisition strategy will
enable INV to build a portfolio with a good balance between growth and stability.
In regards to hotels, INV will take into consideration the trends in foreign travelers visiting Japan, demands ofbusiness and leisure customers in nearby areas, and leasing contract types when making investment decisions, withthe aim of acquiring properties where growth and stability of GOP and rental revenue are forecasted to increase. On
July 25, 2017, INV decided to acquire a portion ((i) a portion of the first floor and (ii) the entire of the second andthird floor) of the annex building of Hotel MyStays Gotanda Station, after considering its attractive yield which is
expected to improve the profitability of overall portfolio as well as the Hotel MyStays Gotanda Station. The
acquisition of the 49 additional rooms at Hotel MyStays Gotanda Station is to be made on condition precedent thatthe conversion work from office space to new hotel rooms is completed, with the anticipated closing date ofOctober 31, 2017.
In regards to residential properties, INV will analyze occupancy rates, rental market trends, the presence ofcompeting properties among other factors, and consider acquiring properties that have mainly small-type rooms
with strong competitiveness in large cities, in which it believes it can achieve increases in rent.
INV has achieved steady external growth via the sponsor pipeline from the Fortress Group, as follows.
Properties Acquired from affiliates of the Fortress Group (as of the date of this document)
Date

Properties acquired

Total acquisition price

September 2012
May 2014
July 2014
February 2015

24 residential properties
Two hotels
18 hotels
Two hotels
11 hotels andthree residential properties
One hotel
Five hotels andone residential property
Four hotels andone residential property
Two hotels
Two residential properties
One hotel
77 properties(of which 46 are hotels and
31 are residential properties)

JPY 14,043 million
JPY 5,435 million
JPY 39,938 million
JPY 4,911 million

July 2015
August 2015
January 2016
March 2016
June 2016
March 2017
May 2017
Total

JPY 35,258 million
JPY 5,069 million
JPY 10,207 million
JPY 66,697 million
JPY 15,900 million
JPY 24,562 million
JPY 8,000 million
JPY 230,020 million(of which hotels: JPY 178,382 million;
residential: JPY 51,638 million)

The Fortress Group manages four dedicated Japanese real estate funds, including the Fortress Japan Opportunity
Funds I, II, and III. The Fortress Group’s committed equity is over JPY 300 billion and the number of properties
that the Fortress Group is invested in exceeds 1,400. In order to ensure future growth options for the portfolio, INV
entered into an updated MOU with affiliates of the Fortress Group that provides preferential negotiation rights withrespect to the acquisition of 21 hotels and nine residential properties (see the table below) (Note 2). In addition, by
utilizing the property transaction information available through the Fortress Group and INV’s own network, INV
will continuously consider and implement the acquisitions of properties from third parties that will contribute tostability and growth in revenue and cash flow and an increase in DPU.
11

Asset name

No.

Asset type (Note 3)

Location

No. of rooms

1

Hotel MyStays Premier Akasaka

Limited Service Hotel

Minato-ku,Tokyo

327

2

Hotel MyStays Yokohama Kannai

Limited Service Hotel

Yokohama-shi, Kanagawa

165

3

RIHGA Royal Hotel Kyoto

Full Service Hotel

Kyoto-shi, Kyoto

489

4

Narita Excel Hotel Tokyu

Full Service Hotel

Narita-shi, Chiba

706

5

Hotel MyStays Premier Sapporo Park

Full Service Hotel

Sapporo-shi, Hokkaido

418

6

Hotel MyStays Sapporo Station

Limited Service Hotel

Sapporo-shi, Hokkaido

242

7

Hotel MyStays Oita

Limited Service Hotel

Oita-shi, Oita

145

8

Art Hotel Hirosaki City

Full Service Hotel

Hirosaki-shi, Aomori

134

9

Beppu Kamenoi Hotel

Resort Hotel

Beppu-shi, Oita

322

10 Fusaki Resort Village

Resort Hotel

Ishigaki-shi, Okinawa

195

Full Service Hotel

Urayasu-shi, Chiba

1,016

Limited Service Hotel

Osaka-shi, Osaka

397

Full Service Hotel

Asahikawa-shi, Hokkaido

265

Limited Service Hotel

Kanazawa-shi, Ishikawa

206

15 Hotel MyStays Matsuyama

Full Service Hotel

Matsuyama-shi, Ehime161

16 Hotel MyStays Ueno East

Limited Service Hotel

Taito-ku, Tokyo150

11 Sheraton Grande Tokyo Bay Hotel
Hotel MyStays Shin Osaka
12
Conference Center
13 Art Hotel Asahikawa
14 Hotel MyStays Kanazawa Castle

17(Tentative) Hotel MyStays Honmachi
3-chome (Note 4)

Limited Service Hotel

Osaka-shi, Osaka

120

18

Hotel MyStays Sapporo Nakajima
Park

Limited Service Hotel

Sapporo-shi, Hokkaido

86

Limited Service Hotel

Yokohama-shi, Kanagawa

70

Limited Service Hotel

Taito-ku, Tokyo

161

Limited Service Hotel

Shinagawa-ku, Tokyo

232

19 Flexstay Inn Sakuragicho
20

MyCUBE by MYSTAYS Asakusa
Kuramae21 Hotel MyStays Premier Omori

Hotel subtotal

6,007

22 Gran Charm Hiroo

Residential/Small TypeShibuya-ku, Tokyo

121

23 Plestay Win Kinshicho

Residential/Small Type

Sumida-ku, Tokyo92

24 Gran Charm Kichijoji

Residential/Small TypeMusashino-shi, Tokyo28

25 Green Patio Noda

Residential/Small Type

Noda-shi, Chiba

240

26 Dainichi F-45

Residential/Small Type

Urayasu-shi, Chiba

54

27 Gran Charm Urayasu

Residential/Small Type

Urayasu-shi, Chiba

54

28 Gran Charm Urayasu 5

Residential/Small Type

Urayasu-shi, Chiba

54

29 Gran Charm Minami Gyotoku I

Residential/Small Type

Ichikawa-shi, Chiba

52

30 Gran Charm Minami Gyotoku II

Residential/Small Type

Ichikawa-shi, Chiba

48

Residential property subtotal

743(Note 1)The percentage indicates composition of annual rent revenue based on the 2016 actual results of annual rent
revenue for all of the properties owned by INV and on the assumption that all properties acquired in and after
2016 by INV had been owned since January 1, 2016. The actual results before acquisition by INV are basedon the data provided by the sellers. With regard to Hotel MyStays Premier Hamamatsucho, the 2017 revenue
forecast (January-April: Actual / May-December: Forecast) estimated by INV is used, as the revenue in 2016
temporarily declined due to the renovation work from August 2016 to November 2016.

(Note 2)The term of validity of the MOU is from December 22, 2016, the date of execution of the updated MOU, to
December 21, 2017. Regarding the 30 properties listed above, there is no guarantee that INV will be granted
an opportunity for considering acquisition of the properties or be able to acquire the properties.

(Note 3)

Each “Asset Type” above is as follows:
12

“Limited Service Hotel” refers to a hotel focusing on revenues from room stay and offer limited service
regarding foods and beverages, banquet, spa or gymnasium facilities.
“Full Service Hotel” refers to a hotel having segments of stay, foods and beverages, and banquet.
“Resort Hotel” refers to a hotel located at tourist destinations or recreational lots, having segments of stay,foods and beverages, and incidental facilities.
“Small Type” refers to a residential property in which the majority of dwelling units are less than 30 m2.
(Note 4)

(Tentative) Hotel MyStays Honmachi 3-chome is scheduled to be completed in November 2017 and open in
December 2017.

Property Sales
While INV places priority on increasing unitholders’ value through external growth by taking into account theincreased level of activity in the real estate trading market, it also considers the possibility of portfolio optimization
upon consideration of the portfolio sector composition, geographic distribution and competitiveness of each property,
as appropriate.
On July 25, 2017, INV decided to sell one office building (Kindai Kagaku Sha Building) and one parking lot(Times Kanda-Sudacho 4th). The portfolio rebalances, whereby acquiring an additional portion of Hotel MyStays
Gotanda Station at an estimated NOI cap rate of 7.3% (Note 1) and selling two non-core assets at a 3.8% NOI cap
rate, is expected to improve the overall NOI yield for the portfolio. The sale of the two non-core assets, which weresold at prices exceeding both the book and appraisal values, was completed on July 31, 2017, and the acquisition ofan additional portion of Hotel MyStays Gotanda Station as described above, is expected to be closed on October 31,
2017.
(Note 1) Calculated by dividing the NOI of Hotel MyStays Gotanda Station to be increased after the additional
acquisition as estimated by INV as of the time of acquisition decision by the anticipated acquisition price,which is rounded to one decimal place. As the anticipated acquisition price may change as described
below in “c. Significant Subsequent Events,” the estimated NOI cap may vary.
(ii)

Strategy for internal growth(Hotels)
Of the 49 hotels owned by INV as of the end of the Reporting Period, 40 hotels use a variable rent scheme. In thevariable rent scheme, in principle, INV receives all of gross operating profit (GOP) after deducting management
fees for the hotel operator as rents, and as a result INV can directly enjoy the hotel revenue upside. In the casewhere GOP enters into a downward trend, INV could take advantage from the fixed rent portion or downside floor
to protect itself from further loss. For 35 hotels (Note 1), MHM has implemented sophisticated revenue
management seeking to maximize revenue. INV will continue to accurately ascertain and analyze operating
conditions of its hotels, the conditions of nearby hotels, market trends and other factors through operation meetingsand other contact with hotel operators and will focus on operations that maximize rent income.
(Residential properties and others)
INV will continue to strengthen its collaborative ties with PM and brokers to further boost occupancy rates andearning capabilities of its properties. With respect to INV’s residential properties, while keeping in mind theoff-season in the residential rental market that occurs during the December 2017 period, INV will focus on
increasing the occupancy rate and rent for both new lease contracts and lease renewals for each of its properties aswell as formulating net leasing cost reduction policies in order to continue maximizing profits.
Further, the implementation of appropriate maintenance and repair plans is of the utmost importance in maintaining
and enhancing the competitiveness and market value of the properties as well as ensuring stable operations andhigh tenant satisfaction. Therefore, INV will continue to monitor current strategic plans with flexible
implementation as it sees fit. Especially for hotels, INV will carefully execute the plans for renovations andreplacement of fixtures and fittings in order to maintain and increase revenues.
(Note 1)

Hotel MyStays Dojima (former Hotel Vista Premio Dojima), whose operator was changed effective on
August 1, 2017, is included.
13

(iii) Financial strategy
In the Reporting Period, INV has added new lenders and strengthened its relationship with existing lenders throughthe Public Offering and new borrowings in March 2017, in order to further stabilize its financial base. Goingforward, INV will work on diversifying financing measures including issuing investment corporation bonds. Also,
INV seeks to maximize unitholders’ value by way of extension of loan tenor, diversification of loan maturity dates,
further reduction of borrowing costs and improvement of its credit rating.
(iv) Compliance risk management
While the executive officer of INV concurrently serves as the representative director at the Asset Manager, two
supervisory directors (an attorney and a certified public account) oversee the execution of the executive officer’s
duties via the Board of Directors of INV. In addition, the compliance officer of the Asset Manager attends eachmeeting of the Board of Directors in the capacity of an observer.
The Asset Manager has a compliance officer who is responsible for compliance with laws, regulations and otherrelevant matters as well as overall management of transactions with sponsor related parties. Moreover, it has in placea compliance committee which, chaired by such compliance officer, is in charge of deliberating on compliance withlaws, regulations and other relevant matters as well as transactions with sponsor related parties. Compliancecommittee meetings are attended by an outside expert (an attorney) who, sitting in as a compliance committee
member, conducts rigorous deliberations on the existence of conflicts of interest in transactions with sponsor relatedparties as well as strict examinations with respect to INV’s compliance with laws and regulations.
INV intends to continually take steps to strengthen its compliance structure.
c

Significant Subsequent Events
On July 25, 2017, INV decided to sell one office building and one parking lot (the “Sale of Assets”) and to acquire a
portion ((i) a portion of the first floor and (ii) the entire of the second and third floor) of the annex building of Hotel
MyStays Gotanda Station (the “Additional Acquisition”) with cash on hand including the sale proceeds from the Sale ofAssets. The Additional Acquisition will add 49 hotel rooms to Hotel MyStays Gotanda after the completion of theconversion work from office space to new hotel rooms. The Sale of Assets closed on July 31, 2017. As a result, INV's
portfolio comprises of 125 properties (49 hotels, 70 residential properties and six others) with a total acquisition price of
JPY 297,781 million as of the date of this document. The total acquisition price is expected to increase to JPY 299,661
million after the Additional Acquisition which is expected to close on October 31, 2017.

(a)Property Sales

The Asset Manager decided to sell one office building and one parking lot, and Sales of Assets has been closed on July
31, 2017 as follows:

Acquisition
price(JPY million)

Book value(JPY million)(Note 1)

Sales price(JPY million)(Note 2)Difference
b/w sales
price andbook value(Note 1)

Transferee

Categoryof specified
asset
Trust
BeneficiaryInterest(Note 4)
Real
Property

Property
number

Property name

OfficeBuilding

B08

Kindai Kagaku
Sha Building

1,301

1,201

1,361

159

Undisclosed(Note 3)Parking Lot

C01

Times
Kanda-Sudacho
4th

97

100

130

29

WastecHOLDINGS
Co., Ltd.

1,398

1,301

1,491

188

Use

Total

(Note 1) The book values are anticipated amount as of July 31, 2017. The difference between sales price and bookvalue is provided for reference purpose. INV estimates to recognize a gain on sales of JPY 120 million (ofwhich, JPY 96 million for Kindai Kagaku Sha Building, and JPY 23 million for Times Kanda-Sudacho 4th) in
the December 2017 period, after deducting sales-related expenses.
14

(Note 2) Sales prices do not include adjustments for fixed asset taxes or city planning taxes, or national or local
consumption taxes.
(Note 3) The name of the transferee is not disclosed, as the transferee’s consent has not been obtained for disclosure.
(Note 4) The trust beneficiary interest of Kindai Kagaku Sha Building was integrated in a single trust account withother trust accounts when INV procured funds through debt financing backed by trust assets in July 2011. Intransferring the sole trust beneficiary interest of Kindai Kagaku Sha Building by itself, INV incurred some
expenses to detach the asset from the integrated trust account.
(b)

Property Acquisition

The Asset Manager decided to acquire an additional portion of a hotel (Note 1) with the anticipated closing date ofOctober 31, 2017 as follows:

Use

Hotel

Property
numberD43

Property nameLocation

Anticipatedacquisition
price(JPY million)(Note 3)

Appraisal
value(JPY million)(Note 4)

SellerCategoryof specified
asset

1,880

2,600

Undisclosed(Note 5)

Trust beneficiaryinterest

Hotel MyStays Gotanda
Station (Additional
Shinagawa-ku,
Acquisition Portion)
Tokyo(Note 2)

(Note 1) INV will conduct Additional Acquisition by assuming the buyer's position in the “Purchase and Sale
Agreement of Trust Beneficiary Interest” dated May 12, 2017 (the “PSA”), between the seller above andGotanda Godo Kaisha, the original buyer.
(Note 2) Hotel MyStays Gotanda Station, INV’s portfolio property, comprises two buildings adjacent to each other, theMain Building and the Annex Building, and INV currently owns the entire portion of the Main Building and a
portion of the Annex Building. The hotel (the “Existing Hotel Portion”) has been operated as a portion of eachof the Main Building and the Annex Building that are owned by INV. The portion INV will acquire this timeis (i) a portion of the first floor of the Annex Building and (ii) the entire second and third floor of the Annex
Building (collectively, the “Floor Expansion Portion”), totaling 1,385.46 m2. Conversion work to convert
office space to hotel rooms (the “Conversion”) has been implemented by the seller in an aim to add 49 hotel
rooms. Upon the completion of the Conversion, INV will complete the Additional Acquisition and thus aims
to operate the Existing Hotel Portion and the Floor Expansion Portion together in an efficient manner.
(Note 3) Anticipated acquisition price is the total of (i) purchase price set forth in the PSA, (ii) expenses with regard to
the Conversion, (iii) transfer price of the furniture, fixture and equipment (FF&E), and other expenses.
Expenses with regard to the Conversion and transfer price of the furniture, fixture and equipment (FF&E) are
estimated amount as of the date of the acquisition decision, and are subject to change. Moreover, theanticipated acquisition price does not include adjustments for fixed asset taxes or city planning taxes, as wellas national or local consumption taxes.
(Note 4) As the Floor Expansion Portion is under construction, the appraisal value shows the research value set forth in
the research report on the valuation date of June 30, 2017, issued by Morii Appraisal & Investment Consulting,
Inc. The research value shows the difference between (i) the research value of Existing Hotel Portion andFloor Expansion Portion combined, assuming the completion of the Conversion (JPY 27,400 million) and (ii)the research value for the Existing Hotel Portion before the Additional Acquisition (JPY24,800 million).
(Note 5) The name of the seller is not disclosed, as the seller’s consent has not been obtained for disclosure.

15

dOperational Outlook
The forecast of financial results for the fiscal period ending December 31, 2017 is as follows.
Fiscal period ending December 31, 2017 (from July 1, 2017 to December 31, 2017)
Operating Revenues

JPY 10,781 million

Operating Income

JPY 6,512 million

Ordinary Income

JPY 5,885 million

Net Income

JPY 5,884 million

Total Distribution Amount (Including excess profit distribution)

JPY 5,964 million

Net Income per Unit

JPY 1,524

Distribution per Unit (Excluding excess profit distribution)

JPY 1,524

Excess Profit Distribution per Unit

JPY 21

Distribution per Unit (Including excess profit distribution)

JPY 1,545

For the assumptions underlying the operational outlook for the fiscal period ending December 31, 2017, please see“Assumptions Underlying the Forecast of Financial Results and Distribution for the Fiscal Period ending December
31, 2017 (from July 1, 2017 to December 31, 2017).”(Cautionary Note regarding Forward Looking Statements)
Forward looking statements such as the forecasts set forth herein are based on information currently available andcertain assumptions that are deemed reasonable. Actual operating performance may vary significantly due to factors
not foreseen at the time of this present notice, such as the occurrence of gains and losses associated with the sale ofproperties, repayment of borrowings and a decrease in rent received. Also, this forecast is not a guarantee of
distribution amounts.

16

<Assumptions Underlying the Forecast of Financial Results and Distribution for the Fiscal Period ending December 31, 2017 (fromJuly 1, 2017 to December 31, 2017) >Item
Fiscal period

Assumptions
The 29th fiscal period: from July 1, 2017 to December 31, 2017 (184 days)
Properties held as of the end of the 29th fiscal period: 125 properties

Assets under management

The assets under management are based on the 125 properties held by INV as of today and INV
assumes that there will be no change such as acquisition of new properties or disposition ofproperties held by INV through the end of the fiscal period ending December 2017, except for
the acquisition of an additional portion of Hotel MyStays Gotanda Station expected to be closed
on October 31, 2017.
As of the end of the 29th fiscal period: 3,860,824 units

Units outstanding

INV assumes that there will be no additional issuance of units through the end of the fiscal
period ending December 2017.
Balance as of the end of the 29th fiscal period: JPY 163,990 mn

Interest-bearing liabilities

INV assumes that there will be no other borrowings or prepayments through the end of the fiscal
period ending December 2017.
INV expects to record rental revenues as follows:
December 2017 Fiscal Period
JPY 10,661 mn(JPY 6,604 mn)(JPY 3,340 mn)(JPY 3,264 mn)

・Rental revenues(of these, hotel rents)(fixed hotel rents)(variable hotel rents)

Operating revenues

In addition to rental revenues, INV expects to record an estimated gain on sales of JPY 120
million in connection with the sale of Kindai Kagaku Sha Building and Times Kanda-Sudacho
4th, which closed on July 31, 2017, as operating revenues.
Rental revenues for the fiscal period ending December 2017 are calculated based on estimates asof today from July 2017 to December 2017. In addition, INV assumes there will be nodelinquencies or non-payment of rent by tenants.
The majority of INV’s owned hotels use a variable rent scheme linked to performance of therelevant hotel. Hotel demand is affected by seasonal factors and the December ending fiscal
periods (from July to December) which include summer holiday and autumn outing seasons tend
to record higher revenue than the June ending fiscal periods (from January to June).
Accordingly, INV’s rental revenues tend to be higher in the December ending fiscal periods thanin the June ending fiscal periods.

17

Item

Assumptions
INV expects to incur property related expenses as follows:

Operating expenses

December 2017 fiscal period
JPY 506 mn
・Facility management fees(of these, repair costs)(JPY 31 mn)
JPY 465 mn
・Taxes and other public charges (Note 1)
JPY 10 mn
・Insurance expenses
JPY 2,436 mn
・Depreciation expenses
JPY 395 mn
・Other expenses
Total property related expenses
JPY 3,815 mn(Note 1) Property taxes and city planning taxes, etc. are prorated by the number of days andsettled between seller and buyer and capitalized as acquisition costs for theproperties which were, or expected to be, acquired in 2017, and thus not recorded as
expenses in December 2017 fiscal period. These expenses will be recorded from
June 2018 fiscal period onward.
INV expects to incur operating expenses other than the property related expenses as follows:
December 2017 fiscal period
・Other operating expenses(of these, asset management fees)

JPY 454 mn(JPY 250 mn)

INV expects to record net operating income as follows:
December 2017 fiscal period
NOI

JPY 9,283 mn(JPY 6,270 mn)(JPY 2,648 mn)

・NOI(of these, hotel NOI)(of these, residential NOI)NOI calculation method in the above table is as follows
・NOI＝ Rental Revenues ‐ Property Related Expenses + Depreciation Expenses

INV expects to incur non-operating expenses as follows:
Non-operating expenses

December 2017 fiscal period
JPY 422 mn
JPY 204 mn
JPY 627 mn

・Interest expense
・Finance related costs
Total non-operating expenses

18

Item

Assumptions
The distribution per unit is calculated in accordance with the cash distribution policy as set forthin INV’s Articles of Incorporation.
With respect to the distribution for the fiscal period ending December 2017, INV expects todistribute an aggregate amount of JPY5,964 million (distribution per unit: JPY 1,545) based on
the assumption that excess profit distribution will be paid (JPY 81 million), in addition to net
income for the fiscal period ending December 2017 (JPY 5,884 million) which will be used as
funds.

Distribution per unit

For the fiscal period ending December 2017, INV expects to record deferred gain on hedge ofthe interest rate swap as the valuation and conversion adjustments, etc. of JPY 92 million, whichis equal to the amount for the fiscal period ended June 2017. The distribution per unit iscalculated based on the assumption that fluctuation of the market value of the interest rate swap
does not affect the distribution per unit.
Distribution per unit may vary due to various factors, including changes of the assets undermanagement, fluctuation of rent income associated with reasons such as change of tenants andoccurrences of unexpected repairs.

INV believes maintaining the stability of cash distributions over the medium term is one of themost important factors in determining the amount of distribution for a given fiscal period, andtherefore, INV has adopted the policy to make distributions in excess of profits in order tostabilize distributions, in cases where dilution of investment units or significant expenses are to
be recorded in connection with, among other things, the acquisition of assets or the raising of
capital, leading to a temporary decrease in distribution, taking into consideration the level of
distribution per unit assuming such acquisition of assets or capital raising had contributed for a
full fiscal period.
Excess profit distribution
per unit

INV may also consider making distributions in excess of profits for the purpose of decreasing
the impact from corporate tax increase arising from different rules in tax and accounting
practices, such as treatment on depreciation of fixed term land lease or asset retirement
obligation.
INV intends to make distributions in excess of profits (JPY 21 per unit for the fiscal period
ending December 2017) in order to cope with the discrepancy between tax and accounting
treatment for the fiscal period ending December 2017.

December 2017 fiscal period
Excess profit distribution per unit

JPY 21

INV assumes there will be no amendments to applicable laws and regulations, the taxation
system, accounting standards and other regulations that would affect the foregoing forecasts.
Other

In addition, INV assumes there will be no unforeseen material changes in general economic
trends, real estate market conditions and other trends and conditions.

19

3. Financial Statements(1)

Balance Sheet

Fiscal period ended
December 31, 2016(as of December 31, 2016)
AssetsCurrent assets:
Cash and bank deposits
Cash and bank deposits in trust
Accounts receivable
Rental receivables
Prepaid expenses
Consumption taxes receivable
Other
Allowance for doubtful accounts
Total current assets
Non-current assets:
Property and equipment
Buildings, at cost
Accumulated depreciation
Buildings, net
Buildings and accompanying facilities, at cost
Accumulated depreciation
Buildings and accompanying facilities, net
Structures, at cost
Accumulated depreciation
Structures, net
Tools, furniture and fixtures, at cost
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Buildings in trust, at cost
Accumulated depreciation
Buildings in trust, net
Buildings and accompanying facilities in trust,at costAccumulated depreciation
Buildings and accompanying facilities intrust, net
Structures in trust, at cost
Accumulated depreciation
Structures in trust, net
Tools, furniture and fixtures in trust, at cost
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Total property and equipment, net
Intangible assets
Leasehold rights in trust
Total intangible assets
Investments and other assets
Guarantee deposits
Long-term prepaid expenses
Derivatives assets
Other
Total investments and other assets
Total non-current assets
Total assets
20(Unit: JPY thousand)Fiscal period ended
June 30, 2017(as of June 30, 2017)

8,714,907
5,499,826
19
1,398,433
387,328
32(1,334)
15,999,214

3,532,405
6,065,755
8,204
1,420,192
445,116
20,8230(33)
11,492,465

85,914(10,489)
75,42438,862(22,150)
16,712
2,779(1,467)
1,311
711,834
102,029,376(6,800,686)
95,228,689

85,914(11,031)
74,88338,862(22,925)
15,9372,779(1,533)
1,245
2,395
(67)
2,327
711,834
118,192,822(8,155,443)
110,037,378

23,379,828

26,991,646(4,312,055)(5,092,225)

19,067,773

21,899,421

340,005(158,426)
181,579
651,007(221,184)
429,823
135,384,518
251,097,667

345,467(169,049)
176,417
898,892(273,748)
625,143
142,046,411
275,591,001

8,840,627
8,840,627

16,946,974
16,946,974

613,914616,340
151,259
42,851
1,424,366
261,362,660
277,361,874

1,651,565
601,737
92,24345,0622,390,608
294,928,585
306,421,050

Fiscal period ended
December 31, 2016(as of December 31, 2016)(Unit: JPY thousand)Fiscal period ended
June 30, 2017(as of June 30, 2017)

Liabilities
Current liabilities:
Accounts payable
Accounts payable-otherAccrued expenses
Income taxes payable
Consumption taxes payable
Advances received
Deposits received

182,601
51,825
166,066605
460,521522,072
13,583

170,911
175,062
164,764
605
540,675
15,932

Total current liabilities

1,397,276

1,067,951

142,419,000
2,030,396
28,66331,260163,990,000
2,240,373
28,663
31,468144,509,319

166,290,505

145,906,596

167,358,457

120,367,271

128,984,946

6,264,432

6,264,432*3 (224,225)*3 -Non-current liabilities:
Long-term loans payable
Tenant leasehold and security deposits in trust
Tenant leasehold and security deposits
Asset retirement obligations
Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity:
Unitholders’ capital
Surplus:Capital surplus
Deduction of capital surplus
Allowance for temporary differences
adjustment
Other deduction of capital surplus
Total deduction of capital surplus
Capital surplus (net)
Retained earnings
Total surplus
Total unitholders’ equity
Valuation and translation adjustments:
Deferred gains or losses on hedges
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

21(763,290)(987,516)(987,516)(987,516)

5,276,915
5,659,831

5,276,915
4,708,487

10,936,747

9,985,403

131,304,019

138,970,350

151,259

92,243

151,259

92,243*2 131,455,278*2 139,062,593

277,361,874

306,421,050

(2)Statement of Income and Retained Earnings(Unit: JPY thousand)Fiscal period ended
June 30, 2017(from January 1, 2017 toJune 30, 2017)

Fiscal period ended
December 31, 2016
(from July 1, 2016 to
December 31, 2016)
Operating revenue
Rental revenue－real estate
Total operating revenue
Operating expenses
Property related expenses
Asset management fees
Directors’ compensation
Asset custody fees
Administrative service fees
Provision of allowance for doubtful accounts
Other
Total operating expenses*1 9,511,466*1 9,260,917

9,511,466

9,260,917*1 3,162,067*1 3,518,684

250,000
4,800
14,02627,8901,123
117,347

250,000
4,800
13,59429,98333
99,3603,577,255

3,916,456

5,934,211

5,344,461

Non-operating income
Interest income
Interest on tax refund
Refund of consumption taxes
Other

129
6,722
35,949
385

70
150
1,077

Total non-operating income

43,186

1,297

Non-operating expenses
Interest expenses
Loan-related costs
Investment unit issuance costs

359,540
186,249-

377,451
223,228
42,401

Operating income

545,789

643,080

Ordinary income

Total non-operating expenses

5,431,608

4,702,678

Income before income taxes

5,431,608

4,702,678

605

605

Income taxes
Total income taxes
Net income

605

605

5,431,003

4,702,073

Retained earnings brought forward

228,827

6,414

Unappropriated retained earnings

5,659,831

4,708,487

22

(3)

Statement of Changes in Net Assets

Fiscal period ended December 31, 2016 (from July 1, 2016 to December 31, 2016)(Unit: JPY thousand)Unitholders’ equity
SurplusCapital surplus
Unitholders’capitalBalance at the beginningof the period
Changes during theperiodReversal of reserve fortemporary differences
adjustment
Distributions fromsurplusDistributions in excess
of retained earnings
from allowance fortemporary differences
adjustment

Voluntary reserve

Deduction of capital surplus
Total
Other
Allowance
Capitalfor temporary deduction of deduction of surplus (net)capitalcapitaldifferences
surplussurplusadjustment

Capitalsurplus120,367,271

6,264,432-

ሺ763,290)

ሺ224,225)(763,290)

5,501,141

ሺ224,225)(224,225)

Reserve fortemporarydifferences
adjustment

Voluntary
reserve

708

708

(708)

(708)

Net income
Changes other thanunitholders’ equity(net)
Total changes during theperiodBalance at the end of theperiod--ሺ224,225)-(224,225)(224,225)

(708)

(708)

120,367,271

6,264,432

ሺ224,225)

ሺ763,290)

ሺ987,516)

5,276,915--

Valuation and translation
adjustments

Unitholders’ equity
SurplusRetainedearnings
Balance at the beginningof the period
Changes during theperiodReversal of reserve fortemporary differences
adjustment
Distributions fromsurplusDistributions in excess
of retained earnings
from allowance fortemporary differences
adjustment
Net income
Changes other thanunitholders’ equity(net)
Total changes during theperiodBalance at the end of theperiodTotalunitholders’
Total surplus
equityDeferred
gains orlosses onhedgesTotalvaluation andtranslation
adjustments

Total net
assets(227,532)(227,532)

130,005,009

4,363,420

9,865,270

130,232,542

708

-

-

-

(4,135,302)

ሺ4,135,302)(4,135,302)(4,135,302)

ሺ224,225)(224,225)

ሺ224,225)

5,431,003

5,431,003

5,431,003

5,431,003

378,792

378,792

378,792

1,296,410

1,071,476

1,071,476

378,792

378,792

1,450,268

5,659,831

10,936,747

131,304,019

151,259

151,259

131,455,278

23

Fiscal period ended June 30, 2017 (from January 1, 2017 to June 30, 2017)(Unit: JPY thousand)Unitholders’ equity
SurplusCapital surplus
Unitholders’capitalDeduction of capital surplus
Capital surplus

Balance at the beginningof the period
Changes during theperiodIssuance of new
investment units
Reversal of allowancefor temporary
differences adjustment
Distributions fromsurplus120,367,271

Allowance fortemporarydifferences
adjustment

Other
deduction ofcapital surplus

Total
deduction ofcapital surplus

Capital surplus(net)(224,225)(763,290)(987,516)

5,276,915

224,225(224,225)－－

6,264,432

8,393,450
224,225

Net income
Changes other thanunitholders’ equity(net)
Total changes during theperiodBalance at the end of theperiod8,617,675－

224,225(224,225)－－

128,984,946

6,264,432－(987,516)(987,516)

5,276,915

Unitholders’ equity
SurplusRetainedearnings
Balance at the beginningof the period
Changes during theperiodIssuance of new
investment units
Reversal of allowancefor temporary
differences adjustment
Distributions fromsurplus
Net income
Changes other thanunitholders’ equity(net)
Total changes during theperiodBalance at the end of theperiod5,659,831

Total
surplus10,936,747

Valuation and translation adjustments
Totalunitholders’equity131,304,019

Deferred
gains or losses
on hedges

Totalvaluation andtranslation
adjustments

151,259

151,259

Total
net assets

131,455,278

8,393,450

8,393,450(224,225)(224,225)－－(5,429,192)(5,429,192)(5,429,192)(5,429,192)

4,702,073

4,702,073

4,702,073

4,702,073(59,016)(59,016)(59,016)(951,344)(951,344)

7,666,331(59,016)(59,016)

7,607,315

4,708,487

9,985,403

138,970,350

92,24392,243139,062,593

24

(4)

Statement of Cash Distribution

I

Unappropriated retained earnings

II

Incorporation into unitholders’capitalOf which, reversal of allowance fortemporary differences adjustment

III

Fiscal period ended December 31, 2016
(from July 1, 2016 to December 31, 2016)

Fiscal period ended June 30, 2017(from January 1, 2017 to June 30, 2017)

JPY 5,659,831,868

JPY 4,708,487,837

JPY 224,225,264--

JPY 46,329,888-

JPY 34,747,416

JPY 5,429,192,048

JPY 4,880,081,536

JPY 1,477

JPY 1,264

JPY 5,429,192,048

JPY 4,799,004,232

JPY 1,477

JPY 1,243-

JPY 46,329,888-

JPY 12-

JPY 34,747,416

-

JPY 9

JPY 6,414,556(JPY 90,516,395)

Distributions in excess of retained
earnings
Allowance for temporary
differences adjustment
Other deduction of capital surplus

IV Distributions(Distribution per unit)
Of which, distributions ofearnings(Distributions of earnings perunit)
Of which, allowance fortemporary differences adjustment(Distributions in excess ofretained earnings per unit
(Allowance for temporary
differences adjustment))
Of which, other distributions inexcess of retained earnings(Distributions in excess ofretained earnings per unit (Other
distributions in excess of retained
earnings))
V

Retained earnings (deficit) carriedforward25

Calculation method of distribution
amountAs shown above, the distribution perunit for the Reporting Period is JPY
1,477.
With respect to profit distributions (notincluding Excess Profit Distribution),
INV decided to distribute almost all of
its profit as defined in Article 136,
Paragraph 1 of the Investment Trust Act,remaining after deducting the reversal of
allowance for temporary differences
adjustments, other than fractionalamount per unit less than JPY 1, aiming
to include the maximum amount of
profit distributions in deductible
expenses in accordance with Article
67-15, Paragraph 1 of the Act on Special
Taxation Measures (Act No. 26, 1957).
As a result, the distribution of earnings
per unit (not including Excess Profit
Distribution per unit) is JPY 1,477.
Furthermore, INV has decided not tomake Distribution in excess of profit.

26

As shown above, the distribution perunit for the Reporting Period is JPY
1,264.
With respect to profit distributions (notincluding Excess Profit Distribution),
INV decided to distribute almost all of
its profit as defined in Article 136,
Paragraph 1 of the Investment Trust Act,
other than fractional amount per unit lessthan JPY 1, aiming to include themaximum amount of profit distributions
in deductible expenses in accordancewith Article 67-15, Paragraph 1 of the
Act on Special Taxation Measures (ActNo. 26, 1957). As a result, thedistribution of earnings per unit (notincluding Excess Profit Distribution perunit) is JPY 1,243.
In addition, in accordance with the
distribution policy as set forth in the
Articles of Incorporation, INV makes
distributions in excess of earnings of theamount that it determines (the “Excess
Profit Distribution”). For the Reporting
Period, INV decided to make Excess
Profit Distribution of JPY 46 million inorder to cope with the discrepancy
between tax and accounting treatment,
making Excess Profit Distribution fromthe allowance for temporary differences
adjustment of JPY 12 per unit. INV
decided to also make Excess Profit
Distribution of JPY 34 million as refundof investment in order to stabilize
distributions, making other Excess Profit
Distribution of JPY 9 per unit.

(5)Statement of Cash Flows

Fiscal period ended
December 31, 2016
(from July 1, 2016 to
December 31, 2016)
Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Investment unit issuance costs
Loan-related costs
Interest income
Interest expenses
Increase (decrease) in allowance for doubtful accounts
Decrease (increase) in rental receivable
Decrease (increase) in consumption taxes receivable
Increase (decrease) in accounts payable
Increase (decrease) in consumption taxes payable
Increase (decrease) in accounts payable-other
Increase (decrease) in accrued expenses(Unit: JPY thousand)Fiscal period ended
June 30, 2017(from January 1, 2017 toJune 30, 2017)

5,431,608
2,065,066
186,249(129)
359,540(1,430)(22,587)
2,672,787(66,883)
460,521(881,047)(5,946)

4,702,678
2,281,374
42,401
223,228(70)
377,451(1,301)(21,759)(20,823)
81,748(460,521)
25,473444

14,936(23,418)(12,451)

18,602(21,461)(17,577)

Subtotal

10,176,817

7,209,888

Interest income received
Interest expenses paid
Income taxes paid

129
(358,219)(605)

70(379,198)(605)

Net cash provided by operating activities

9,818,122

6,830,155(8,449,701)-(2,395)(26,684,589)(8,187,950)(53,815)(79,334)

48,371

290,004(2,211)(1,037,651)(2,211)

Net cash used in investing activities(8,457,356)(35,704,126)

Cash flows from financing activities
Repayment of short-term loans payable
Proceeds from long-term loans payable(3,498,000)
4,000,000

21,571,000

Payments for loan-related costs
Payment of distributions of earnings
Payment of distribution in excess of retained earnings
from allowance for temporary differences adjustment
Proceeds from issuance of investment units
Other, net(53,775)(4,118,229)(257,922)(5,406,728)(224,225)-(15,879)

8,351,048-

Net cash provided by (used in) financing activities(3,910,109)

24,257,397

Net increase (decrease) in cash and cash equivalents(2,549,344)(4,616,573)

Cash and cash equivalents at beginning of period

16,764,078

14,214,734*1 14,214,734*1 9,598,161

Increase (decrease) in advances received
Increase (decrease) in deposits received
Others, net

Cash flows from investing activities
Purchases of property and equipment
Purchases of property and equipment in trust
Purchases of leasehold rights in trust
Repayments of tenant leasehold and security deposits
in trust
Proceeds from tenant leasehold and security deposits intrust
Payments of tenant leasehold and security deposits
Other, net

Cash and cash equivalents at end of period

27

(6)

Notes to Concerning Going Concerns Assumption
Not applicable(7)

Notes to Concerning Significant Accounting Policies
1. Method of depreciation of non-current assets(a) Property and equipment (including assets in trust)The straight-line method is used.
The useful lives of major property, plant and equipment are as follows.
Buildings
77 years
Buildings and accompanying facilities
8-24 years
Structures
7-18 years
Tools, furniture and fixtures
8 years
Buildings in trust
5-67 years
Buildings and accompanying facilities in trust
2-33 years
Structures in trust
3-55 years
Tools, furniture and fixtures in trust
2-19 years(b) Intangible assets
The straight-line method is used. For leasehold rights in trust (fixed-term land lease for business purposes), the straight-line
method based on the lease period is used.
(c) Long-term prepaid expenses
The straight-line method is used.
2.

Method of calculating allowances
Allowance for doubtful accounts
To reserve for losses on doubtful accounts, allowances are provided for normal receivables using a rate determined basedon past bad debt experiences, and specific allowances are provided for accounts with a possibility of default based on theestimated amounts considered to be uncollectible by considering the collectability of accounts on an individual basis.

3.

Revenue and expense recognition
Accounting treatment of property taxes and other taxes
With respect to property taxes, city planning taxes and depreciable asset taxes, of the tax amount assessed and determined,
the amount corresponding to the relevant fiscal period is accounted for as property related expenses.
Of the amounts paid to the seller for acquisitions of real estate, the amount equivalent to property taxes is capitalized as partof the acquisition cost of the real estate instead of being charged as expense. The amount equivalent to property taxes thatwas included as part of the acquisition of real estate during the fiscal period ended June 30, 2017 is JPY 78,074 thousand.

4.

Method of hedge accounting(a) Method of hedge accounting
Deferred hedge accounting is used.
(b) Hedging instrument and hedged item
Hedging instrument: interest rate swap
Hedged item: interest on borrowings(c) Hedge policy
INV enters into derivative transactions for the purpose of hedging against the risks set forth in INV’s Articles ofIncorporation in accordance with its risk management policy.

28

(d) Method of evaluating hedge effectivenessHedge effectiveness is evaluated by comparing the cumulative amount of changes in cash flows of the hedging instrument
and the cumulative amount of changes in cash flows of the hedged item and verifying the difference in the amounts ofchange of both the hedged item and the hedging instrument.
5.

Cash and cash equivalents as stated in Statement of Cash Flows
Cash and cash equivalents as stated in the Statement of Cash Flows consist of cash on hand and cash in trust, floating
deposits, deposits in trust and short-term investments that are very liquid and realizable with a maturity of three months orless when purchased and that are not subject to significant risks of changes in value.

6.

Other significant matters which constitute the basis for preparation of financial statements(i) Accounting treatment of trust beneficiary interests in real estate
As to trust beneficiary interests in real estate, all accounts of assets and liabilities within assets in trust, as well as all income
generated and expenses incurred from assets in trust, are recorded in the relevant balance sheets and income statement
accounts. Of such items, the following significant trust assets and liabilities are shown separately on the balance sheet.
(a) Cash and bank deposits in trust(b) Buildings in trust
Buildings and accompanying facilities in trust
Structures in trust
Tools, furniture and fixtures in trust
Land in trust(c) Leasehold rights in trust(d) Tenant leasehold and security deposits in trust(ii) Accounting treatment of deferred assets
Investment unit issuance costs
The full amount is recorded as expense at the time of expenditure.
(iii) Accounting treatment of consumption taxes
Transactions subject to consumption taxes are recorded at amounts exclusive of consumption taxes.

(Additional Information)(Notes Related to Provision and Reversal of Allowance for Temporary Differences Adjustment)
Fiscal period ended December 31, 2016 (from July 1, 2016 to December 31, 2016)
Reversal of the JPY 224,225 thousand in allowance for temporary differences adjustment for changes in the fair valueof interest rate swaps was made in the statement of cash distribution.
Fiscal period ended June 30, 2017 (from January 1, 2017 to June 30, 2017)
The following provision was made in the statement of cash distribution:
1. Reasons, related assets and amounts

Related assets, etc.
Leasehold rights in trust

ReasonDepreciation of leasehold rights(Unit: JPY thousand)Allowance fortemporary differences adjustment
46,3292. Method of reversal
Related assets, etc.
Leasehold rights in trust

Method of reversal
The corresponding amount is scheduled to be reversed upon sale, etc.
29

(8)

Notes to the Financial Statements(Notes to the Balance Sheet)

1.

Matters concerning treatment of reversal of reserve for temporary differences adjustment.
Fiscal period ended December 31, 2016 (as of December 31, 2016)
INV reversed all of the reserve for temporary differences adjustment in the amount of JPY 708 thousand, and used thefunds as part of the profit distributions.
Fiscal period ended June 30, 2017 (as of June 30, 2017)
Not applicable*2.

Minimum net assets as required by Article 67, Paragraph 4 of the Act on Investment Trusts and Investment Corporations(Unit: JPY thousand)Fiscal period ended
June 30, 2017(as of June 30, 2017)
50,000Fiscal period ended
December 31, 2016(as of December 31, 2016)
50,000*3.

Allowance for temporary differences adjustment
Fiscal period ended December 31, 2016 (as of December 31, 2016)
1. Reasons, related assets and amounts
Balance atthe end of
previous
period(Unit: JPY thousand)
Balance atReversalthe end of
duringcurrent
periodperiodAllowance
set aside
duringperiodRelatedassets, etc.

ReasonInitialamountDeferred
gains orlosses onhedgesLoss oninterest-rate
swaps
recognized(224,225)-(224,225)-(224,225)(224,225)-(224,225)-(224,225)

Total

2. Method of reversal(1) Deferred gains or losses on hedges
Based on changes in the fair value of derivatives used as hedging instruments, the corresponding amount isscheduled to be reversed.
Fiscal period ended June 30, 2017 (as of June 30, 2017)
1. Reasons, related assets and amounts(Unit: JPY thousand)
Balance atReversalthe end of
duringcurrent
periodperiodRelatedassets, etc.

ReasonInitialamountBalance atthe end of
previous
periodDeferred
gains orlosses onhedgesChanges infair value ofderivatives(224,225)(224,225)-

224,225-(224,225)(224,225)-

224,225-

Total

Allowance
set aside
duringperiod

2. Method of reversal(1) Deferred gains or losses on hedges
Based on changes in the fair value of derivatives used as hedging instruments, the corresponding amount isscheduled to be reversed.
30

(Notes to Statement of Income and Retained Earnings)*1.

Real estate rental revenues and expenses
Fiscal period ended
December 31, 2016
(from July 1, 2016 to
December 31, 2016)

A.

(Unit: JPY thousand)Fiscal period ended
June 30, 2017(from January 1, 2017 toJune 30, 2017)

Real estate rental revenues

Rental revenue-real estate
Rent/common area charges

273,682

333,135

9,511,466

9,260,917

Maintenance costs

580,896646,226

Taxes and public dues

356,372

390,797

Other revenues
Total
B.

8,927,781

9,237,784

Real estate rental expenses

Property related expenses

Non-life insurance expenses
Depreciation expenses

11,807

10,1952,065,066

2,281,374

147,924

190,090

Total

3,162,067

3,518,684

C.

6,349,399

5,742,232

Other expenses

Real estate rental income (A-B)(Notes to Statement of Changes in Net Assets)

Number of issuable investment units authorized and number of investment units issued and outstanding
Fiscal period ended
December 31, 2016
(from July 1, 2016 to
December 31, 2016)

Fiscal period ended
June 30, 2017(from January 1, 2017 toJune 30, 2017)

Number of issuable investment units

10,000,000 units

10,000,000 units

Number of investment units issued and outstanding

3,675,824 units

3,860,824 units(Notes to Statement of Cash Flows)*1.
Relationship between cash and cash equivalents in statement of cash flows and amounts in accompanying balance sheet is
as follows:

Cash and bank deposits

8,714,907(Unit: JPY thousand)Fiscal period ended
June 30, 2017(from January 1, 2017 toJune 30, 2017)
3,532,405

Cash and bank deposits in trust

5,499,826

6,065,755

Cash and cash equivalents

14,214,734

9,598,161

Fiscal period ended
December 31, 2016
(from July 1, 2016 to
December 31, 2016)31

(Notes Related to Lease Transactions)Operating lease transactions (as lessee)
Unexpired lease fees

244,619(Unit: JPY thousand)Fiscal period ended
June 30, 2017(as of June 30, 2017)
312,959

Due after one year

7,367,989

10,403,515

Total

7,612,609

10,716,474

Fiscal period ended
December 31, 2016(as of December 31, 2016)
Due within one year

Operating lease transactions (as lessor)
Unexpired lease fees

5,988,176(Unit: JPY thousand)Fiscal period ended
June 30, 2017(as of June 30, 2017)
6,579,788

Due after one year

47,412,300

47,397,583

Total

53,400,477

53,977,372

Fiscal period ended
December 31, 2016(as of December 31, 2016)
Due within one year

(Notes Related to Financial Instruments)
1.

Status of financial instruments(1) Policy for financial instruments
INV principally conducts its operations through investments in real estate and other specified assets to seek to ensure stable
income in the medium to long term.
The policy for raising funds is principally through issuing new investment units or borrowing loans.
Derivative transactions are to be entered into for the purpose of hedging against the risk of future interest rate increases, etc.
and not for speculation.
Surplus funds are managed after carefully taking into account safety, liquidity, the interest rate environment and financing.
(2) Nature and extent of risks arising from financial instruments and risk management
The funds raised through borrowings are mainly used to acquire real estate properties or trust beneficiary interest in realestate (including related acquisition costs) and for the refinancing of existing loan. Liquidity risks relating to loan are
managed by the finance department of the Asset Manager by preparing and updating plans for funds, and monitoring thecovenants set forth in loan agreements.
(3) Supplemental information regarding market value, etc. for financial instruments
The fair value of financial instruments is based on quoted market prices if available. When quoted market prices are notavailable, fair value is determined through a reasonable estimate. Since certain assumptions, etc. are used in estimating thefair value, different assumptions, etc. may result in the variance of such value.

32

2.

Estimated fair value of financial instruments

Fiscal period ended December 31, 2016 (as of December 31, 2016)
Book value, fair value and the difference between values as of December 31, 2016 are as follows.
(Unit: JPY thousand)Book Value

Fair Value

Difference(1) Cash and bank deposits

8,714,907

8,714,907-(2) Cash and bank deposits in trust

5,499,826

5,499,826-

14,214,734

14,214,734-(142,419,000)(142,419,000)-(142,419,000)(142,419,000)-

151,259

151,259-

Total assets(3) Long-term loans
Total liabilities(4) Derivatives

Fiscal period ended June 30, 2017 (as of June 30, 2017)
Book value, fair value and the difference between values as of June 30, 2017 are as follows.
(Unit: JPY thousand)Book Value

Fair Value

Difference(1) Cash and bank deposits

3,532,405

3,532,405-(2) Cash and bank deposits in trust

6,065,755

6,065,755-

9,598,161

9,598,161-(163,990,000)(163,990,000)-(163,990,000)(163,990,000)-

92,24392,243-

Total assets(3) Long-term loans
Total liabilities(4) Derivatives(Note 1) Items recorded in the Liabilities Section are shown in parenthesis.
(Note 2) Receivables and payables arising from derivative transactions are recorded in net amounts, and if the total net amountis a negative amount, such amount is shown in parenthesis.
(Note 1) Methods to calculate fair values of financial instruments(1) Cash and bank deposits (2) Cash and bank deposits in trust
Due to the short maturities, the book value of these instruments is deemed a reasonable approximation of the fairvalue, and therefore, the book value is used as the fair value.
(3) Long-term loans
Long-term loan with floating interest rates reflecting changes in market rates within a short term period are stated attheir book value as their book value approximate their fair value.
(4) Derivatives
Please refer to the “Notes Related to Derivative Transactions” below.

33

(Note 2) Financial instruments for which fair value is extremely difficult to value(Unit: JPY thousand)Fiscal period ended
June 30, 2017(as of June 30, 2017)

Fiscal period ended
December 31, 2016(as of December 31, 2016)

Tenant leasehold and28,663
28,663security deposits
Tenant leasehold and2,240,373
2,030,396
security deposits in trust
Tenant leasehold and security deposits and tenant leasehold and security deposits in trust have no observable market price,
and it is impracticable to reasonably estimate their future cash flows because the repayment dates of those deposits and thetiming of the lessee’s exit from the property are not certain. Thus, their fair value is not disclosed.
(Note 3) Remaining schedule of monetary claims after the closing date of the fiscal period
Fiscal period ended December 31, 2016 (as of December 31, 2016)

Cash and bank deposits(Unit: JPY thousand)Due within Due after one Due after two Due after three Due after four
Due after
one yearto two years to three years to four years to five years
five years
8,714,907-

Cash and bank deposits in trust

5,499,826

-

-

-

-

-

Total

14,214,734

-

-

-

-

-

Fiscal period ended June 30, 2017 (as of June 30, 2017)

Cash and bank deposits(Unit: JPY thousand)Due within Due after one Due after two Due after three Due after four
Due after
one yearto two years to three years to four years to five years
five years
3,532,405-

Cash and bank deposits in trust

6,065,755

-

-

-

-

-

Total

9,598,161

-

-

-

-

-

(Note 4) Repayment schedule of long-term loans and other interest-bearing debts after the closing date of the fiscal period
Fiscal period ended December 31, 2016 (as of December 31, 2016)
Due within
one yearLong-term loans
Total(Unit: JPY thousand)Due after one Due after two Due after three Due after four
Due after
to two years to three years to four years to five years
five years
28,979,000
51,045,000
42,012,000
20,383,000-

28,979,000

51,045,000

42,012,000

20,383,000-

Fiscal period ended June 30, 2017 (as of June 30, 2017)
Due within
one yearLong-term loans
Total(Unit: JPY thousand)Due after one Due after two Due after three Due after four
Due after
to two years to three years to four years to five years
five years
46,663,000
48,044,000
55,512,000
13,771,000-

46,663,000

34

48,044,000

55,512,000

13,771,000-

(Notes Related to Investment Securities)
Not applicable(Notes Related to Derivative Transactions)1.

Derivative transactions to which hedge accounting is not applied
Fiscal period ended December 31, 2016 (as of December 31, 2016)
Not applicable
Fiscal period ended June 30, 2017 (as of June 30, 2017)
Not applicable2.

Derivative transactions to which hedge accounting is applied
Fiscal period ended December 31, 2016 (as of December 31, 2016)
The contract amount as of the closing date under each hedge-accounting method and the amount equivalent to thenotional principal prescribed in the contracts are as shown below.
(Unit: JPY thousand)
Method of hedge
accounting

Derivative transaction
type, etc.

Primary hedged
item

Contract amount, etc. (*1)
Amount due
after one year

Fair value (*2)

Interest rate swap
Long-term
99,119,000
99,119,000
151,259
Receive floating
loans
rate/pay fixed rate
(Note 1) The contract amount, etc. is stated based on a notional principal.
(Note 2) The fair value is estimated based on the price, etc. presented by the correspondent financial institutions.
Principle accounting
methodFiscal period ended June 30, 2017 (as of June 30, 2017)
The contract amount as of the closing date under each hedge-accounting method and the amount equivalent to thenotional principal prescribed in the contracts are as shown below.
(Unit: JPY thousand)
Method of hedge
accounting

Derivative transaction
type, etc.

Primary hedged
item

Contract amount, etc. (*1)
Amount due
after one year

Fair value (*2)

Interest rate swap
Long-term
99,119,000
99,119,000
92,243
Receive floating
loans
rate/pay fixed rate
(Note 1) The contract amount, etc. is stated based on a notional principal.
(Note 2) The fair value is estimated based on the price, etc. presented by the correspondent financial institutions.
Principle accounting
method(Notes Related to Retirements Payments)
Not applicable(Notes Related to Asset Retirement Obligations)1.

Summary of the asset retirement obligations for the period
INV has recorded asset retirement obligations in regard to its obligation to restore the land to its original condition related
to the fixed-term land lease agreement of Comfort Hotel Maebashi held by INV.

2.

Calculation method for asset retirement obligations for the period
The amount of the asset retirement obligations has been calculated by estimating the period of use at 43 years, based on theremaining period until the expiration of the fixed-term land lease agreement, and by using a discount rate of 1.342%.
35

3.

Increase/decrease in the total amount of asset retirement obligations
Fiscal period ended
December 31, 2016
(from July 1, 2016 to
December 31, 2016)
31,050209
31,260

Balance at the beginning of the period
Increase due to the acquisition of properties
Accretion expense
Balance at the end of the period(Unit: JPY thousand)Fiscal period ended
June 30, 2017(from January 1, 2017 toJune 30, 2017)31,260208
31,468(Notes Related to Segment and Related Information)
I. Segment Information
Disclosure is omitted because the real estate investment business is INV’s sole business and it has no reportable segments.
II. Related Information
Fiscal period ended December 31, 2016 (from July 1, 2016 to December 31, 2016)
1. Information about each product and service
Disclosure is omitted because net sales to external customers for a single product/service category accounted for over
90% of the operating revenue on the statement of income.
2. Information about each geographic area
(1) Net sales
Disclosure is omitted because net sales to external customers in Japan accounted for over 90% of the operating revenue
on the statement of income.
(2) Property and equipment
Disclosure is omitted because the amount of property and equipment located in Japan accounted for over 90% of theamount of property and equipment on the balance sheet.
3. Information about each major customer(Unit: JPY thousand)Name of customer

Operating revenues

Related segment

MyStays Hotel Management Co., Ltd.

4,043,845

Real Estate Investment

Naqua Hotel & Resorts Management Co., Ltd.

1,040,790

Real Estate Investment

Fiscal period ended June 30, 2017 (from January 1, 2017 to June 30, 2017)
1. Information about each product and service
Disclosure is omitted because net sales to external customers for a single product/service category accounted for over
90% of the operating revenue on the statement of income.
2. Information about each geographic area
(1) Net sales
Disclosure is omitted because net sales to external customers in Japan accounted for over 90% of the operating revenue
on the statement of income.
(2) Property and equipment
Disclosure is omitted because the amount of property and equipment located in Japan accounted for over 90% of theamount of property and equipment on the balance sheet.
3. Information about each major customer(Unit: JPY thousand)Name of customer

Operating revenues
3,852,826

MyStays Hotel Management Co., Ltd.
36

Related segment
Real Estate Investment

(Notes Related to Rental Properties)
INV owns residential properties and hotels as core assets as well as other various properties including offices and commercial
facilities principally in the Tokyo area and major regional cities in order to establish a portfolio which focuses on both stability
and growth potential. The book value changed during the period and balance at the end of the period are as follows.
Fiscal period ended
December 31, 2016
(from July 1, 2016 to
December 31, 2016)

Residences

Book value

Balance at the
beginning of the period
Change during theperiodBalance at the end of
the period

Fair value at the end of the period

OfficesBook value

Balance at the
beginning of the period
Change during theperiodBalance at the end of
the period

Fair value at the end of the period

Commercial facilities

Book value

Balance at the
beginning of the period
Change during theperiodBalance at the end of
the period

Fair value at the end of the period

Parking lots

Book value

Balance at the
beginning of the period
Change during theperiodBalance at the end of
the period

Fair value at the end of the period

HotelsBook value

Balance at the
beginning of the period
Change during theperiodBalance at the end of
the period

Fair value at the end of the period

Total

Book value

Balance at the
beginning of the period
Change during theperiodBalance at the end of
the period

Fair value at the end of the period

37(Unit: JPY thousand)Fiscal period ended
June 30, 2017(from January 1, 2017 toJune 30, 2017)

68,274,496

67,835,839(438,657)

25,277,356

67,835,839

93,113,195

77,843,000

104,752,000

8,470,387

8,440,981(29,405)(16,247)

8,440,981

8,424,734

7,406,000

7,636,000

5,087,525

5,049,226(38,298)(47,956)

5,049,226

5,001,269

5,890,000

5,980,000

100,820

100,819(1)(1)

100,819

100,818

113,000

113,000

179,537,920

178,511,427(1,026,493)

7,386,530

178,511,427

185,897,957

236,940,000

245,021,000

261,471,150

259,938,294(1,532,855)

32,599,681

259,938,294

292,537,976

328,192,000

363,502,000

(Note 1) Book value is the figure calculated by subtracting accumulated depreciation from acquisition price (including
acquisition-related costs).
(Note 2) The major factors for the increase for the fiscal period ended December 31, 2016 was capital expenditures related toconstruction work, and the major factor for the decrease was depreciation. The major factors for the increase for the
fiscal period ended June 30, 2017 were acquisition of residential properties/hotels, capital expenditures related toconstruction work, and the major factor of the decrease was depreciation.
(Note 3) The fair value as of the end of the reporting period is determined based on the appraisal value provided by Asset
Research and Development Inc., Japan Real Estate Institute, Morii Appraisal & Investment Consulting Inc., Tanizawa
Sogo Appraisal Co., Ltd., and Daiwa Real Estate Appraisal Co., Ltd.
For information related to profits and losses from rental properties, please refer to “Notes to Statement of Income and Retained
Earnings.”

38

(Notes Related to Tax Accounting)
1. Significant components of deferred tax assets and liabilities(Unit: JPY thousand)Fiscal period ended
December 31, 2016

Fiscal period ended
June 30, 2017

(Deferred tax assets - current assets)
Enterprise tax payable

661

996

Allowance for doubtful accounts

423

10

Subtotal

1,084

1,006

Valuation allowance

1,084

1,006

Total

-

-

(Deferred tax assets, net)--(Deferred tax assets - non-current assets)
700,210689,159

Land (merger)

2,092,087

2,092,087

Loss carried forward

7,200,289

7,200,289

Asset retirement obligations

9,921

9,987

Depreciation of fixed-term leasehold rights

16,24842,14910,018,757

10,033,674

Buildings and other (merger)

Subtotal(Deferred tax liabilities – non-current liabilities)
Removal expenses included in asset retirement
obligations
Deferred gains or losses on hedges

9,797

9,797

48,00929,278Subtotal

57,80739,0759,960,950

9,994,598

Total

-

-

(Deferred tax assets, net)--

Valuation allowance

2. Significant difference between statutory tax rate and the effective tax rate
(Unit: %)Fiscal period ended
December 31, 2016

Fiscal period ended
June 30, 2017
31.74

31.74

Deductible cash distributions(31.71)(32.06)

Changes in valuation allowance(0.09)(0.32)

Others0.08

0.65

Effective tax rate

0.01

0.01

Statutory tax rate

(Notes Related to Equity-Method Income)Not applicable39

(Notes Related to Transactions with Related Parties)
1.

Transactions with Parent Company and Major Unitholders
Fiscal period ended December 31, 2016 (from July 1, 2016 to December 31, 2016)

Classification

Interested partyof the AssetManager(Note 1)
(Note 2)

(Note 3)Name

Address

Statedcapital(JPY
million)

Percentage
Relationshipof votingBusiness orrightsCommon Businessoccupation
ownedboard relation(%)
membership

Type oftransaction

Transaction
amount(JPY
thousand)(Note 1)

Account

Balance atthe end of
the period(JPY
thousand)(Note 1)8,800,548

Accounts
payable-92,474--

Seller of
trust
Payment ofbeneficiary
accounts
interests inpayablereal estateHotelbusiness--

Lesseeandoperatorof hotels

Rentalrevenues

1,040,790

Accounts
receivableHotelbusiness--

Lesseeandoperatorof hotels

Rentalrevenues

4,043,845

Accounts
1,146,414
receivable

Ginga Tokutei
Minato-ku,
Mokuteki Kaisha
Tokyo(Note 2)

Investment
0.1 managementbusiness

Naqua Hotel &Resorts
Management
Co., Ltd.
(Note 2)

Minato-ku,
Tokyo

10

MyStays HotelManagement
Co., Ltd.
(Note 2)

Minato-ku,
Tokyo

100

Consumption taxes, etc., are not included in transaction amounts, but are included in the balance at the end of the period.
Ginga Tokutei Mokuteki Kaisha, Naqua Hotel & Resorts Management Co., Ltd., and MyStays Hotel Management Co., Ltd. have no capital
relationship to be disclosed with the Asset Manager. The tenant and operator have received an anonymous partnership investment or investment
through funds that are managed by affiliates of Fortress Investment Group LLC (“FIG”), an affiliate of Calliope. Accordingly, INV treats
Ginga Tokutei Mokuteki Kaisha, Naqua Hotel & Resorts Management Co., Ltd., and MyStays Hotel Management Co., Ltd. as the equivalent tointerested parties.
Calliope holds 609,942 units (holding percentage: 16.6%) of the issued investment units of INV.

Fiscal period ended June 30, 2017 (from January 1, 2017 to June 30, 2017)Classification

Name

Address

Sakura Tokutei
Minato-ku,
Mokuteki Kaisha
Tokyo(Note 3)

Momo Tokutei
Minato-ku,
Mokuteki Kaisha
Tokyo(Note 3)

Interested partyof the Asset
Septentrio 2
Manager
Tokutei Mokuteki Minato-ku,
KaishaTokyo(Note 3)

Statedcapital(JPY
million)Type oftransaction

Transaction
amount(JPY
thousand)(Note 1)

Account

Balance atthe end of
the period(JPY
thousand)(Note 1)-

Seller oftrust
beneficiaryinterests inreal estate

Purchase oftrust
beneficiaryinterests inreal estate(Note 2)
(Note 5)21,879,000

-

-

-

Seller oftrust
beneficiaryinterests inreal estate

Purchase oftrust
beneficiaryinterests inreal estate(Note 2)
(Note 5)2,683,000

-

-

-

-

Seller oftrust
beneficiaryinterests inreal estate

Purchase oftrust
beneficiaryinterests inreal estate(Note 2)
(Note 5)8,000,000--

Accounts
receivable

198,247

Percentage
Relationshipof votingBusiness orrightsCommon Businessoccupation
ownedboard relation(%)
membership

Investment

0.1 management-business

Investment

0.1 management-business

Investment

0.1 managementbusiness

Naqua Hotel &Resorts
Management
Co., Ltd.
(Note 3)

Minato-ku,
Tokyo

10

Hotel
business--

Lesseeandoperatorof hotels

Rentalrevenues

549,169

MyStays HotelManagement
Co., Ltd.
(Note 3)

Minato-ku,
Tokyo

100

Hotel
business--

Lesseeandoperatorof hotels

Rentalrevenues

3,852,826

40

Accounts
1,043,190
receivable

(Note 1)(Note 2)
(Note 3)(Note 4)(Note 5)

Consumption taxes, etc., are not included in transaction amounts, but are included in the balance at the end of the period.
The terms and conditions have been determined based on the Asset Manager’s internal rules and manual regarding transactions with the sponsor
company.
Sakura Tokutei Mokuteki Kaisha, Momo Tokutei Mokuteki Kaisha, Septentrio 2 Tokutei Mokuteki Kaisha, Naqua Hotel & Resorts
Management Co., Ltd., and MyStays Hotel Management Co., Ltd. have no capital relationship to be disclosed with the Asset Manager. The
tenant and operator have received an anonymous partnership investment or investment through funds that are managed by affiliates of Fortress
Investment Group LLC (“FIG”), an affiliate of Calliope. Accordingly, INV treats Sakura Tokutei Mokuteki Kaisha, Momo Tokutei Mokuteki
Kaisha, Septentrio 2 Tokutei Mokuteki Kaisha, Naqua Hotel & Resorts Management Co., Ltd., and MyStays Hotel Management Co., Ltd. as
the equivalent to interested parties.
Calliope holds 609,942 units (holding percentage: 15.8%) of the issued investment units of INV.
The purchase of trust beneficiary interests pertains to the following properties. The transaction amount is the purchase price stated in the trust
beneficiary purchase agreement, to which other expenses for acquisition, property taxes, city planning taxes and consumption taxes are notincluded.

Purchase Price(JPY thousand)

Property Number

Name of Property

Counterparty

A105

Royal Parks Tower Minami-Senju

Sakura Tokutei Mokuteki Kaisha

21,879,000A106Royal Parks Seasir Minami-Senju

Momo Tokutei Mokuteki Kaisha

2,683,000

D49

Hotel MyStays Premier Hamamatsucho Septentrio 2 Tokutei Mokuteki Kaisha
Total

2.

32,562,000

Transactions with Affiliates
None for both the fiscal period ended December 31, 2016 and the fiscal period ended June 30, 2017.

3.

8,000,000

Transactions with Companies under Common Control
None for both the fiscal period ended December 31, 2016 and the fiscal period ended June 30, 2017.

41

4.

Transactions with Directors and Major Unitholders
Fiscal period ended December 31, 2016 (from July 1, 2016 to December 31, 2016)
Balance atTransaction
Ratio ofClassification

Name

Business or occupation

the end ofamountvoting rights

Details of transaction

(%)

(JPY

Account

thousand)

Directors andclose
relatives

Naoki
Fukuda(Note 3)

Payment of asset

INV and President &CEO of Consonant(JPY
thousand)(Note 3)
Executive Director of

the period

management fees to-Consonant Investment

Investment Management

250,000

Management Co., Ltd.

Co., Ltd.

Accruedexpenses

135,000(Note 1)
Payment ofadministrative agency

Same asSame as

above

above

fees for organizational
Same as above-

management to600

Consonant Investment

Accruedexpenses

324

Management Co., Ltd.
(Note 2)
(Note 1)

Naoki Fukuda served as a representative of the third party (the Asset Manager), and the fee is as set forth in the Articles of Incorporation of
INV.

(Note 2)

Naoki Fukuda served as a representative of the third party (the Asset Manager), and the fee is as set forth in “Administrative Agency
Agreement for Organizational Management,” entered into by and between INV and the Asset Manager.

(Note 3)

Consumption taxes, etc. are not included in the transaction amounts, but are included in the balance at the end of the period.

Fiscal period ended June 30, 2017 (from January 1, 2017 to June 30, 2017)
Balance atTransaction
Ratio ofClassification

Name

Business or occupation

the end ofamountvoting rights

Details of transaction

(%)

(JPY

Account

thousand)

Directors andclose
relatives

Naoki
Fukuda(Note 3)

Payment of asset

INV and President &CEO of Consonant(JPY
thousand)(Note 3)
Executive Director of

the period

management fees to-Consonant Investment

Investment Management

253,256

Management Co., Ltd.

Co., Ltd.

Accruedexpenses

135,000(Note 1)
Payment ofadministrative agency

Same asSame as

above

above

fees for organizational
Same as above-

management toConsonant Investment

600

Accruedexpenses

324

Management Co., Ltd.
(Note 2)
(Note 1)

Naoki Fukuda served as a representative of the third party (the Asset Manager), and the fee is as set forth in the Articles of Incorporation of
INV.

(Note 2)

Naoki Fukuda served as a representative of the third party (the Asset Manager), and the fee is as set forth in “Administrative Agency
Agreement for Organizational Management,” entered into by and between INV and the Asset Manager.

(Note 3)

Consumption taxes, etc. are not included in the transaction amounts, but are included in the balance at the end of the period.

42

(Notes Related to Per Unit Information)
Fiscal period ended
June 30, 2017(from January 1, 2017 toJune 30, 2017)

Fiscal period ended
December 31, 2016
(from July 1, 2016 to
December 31, 2016)
Net assets per unit

JPY 35,762

JPY 36,019

Net income per unit

JPY 1,477

JPY 1,241

Net income per unit is calculated by dividing net income for the period by the daily weighted average number of investment
units issued and outstanding. Diluted net income per unit is not stated as there are no diluted units.
(Note)The basis for calculating net income per unit is as follows.

5,431,003

Fiscal period ended
June 30, 2017(from January 1, 2017 toJune 30, 2017)
4,702,073--

5,431,003

4,702,073

3,675,824

3,788,254

Fiscal period ended
December 31, 2016
(from July 1, 2016 to
December 31, 2016)
Net income (JPY thousand)Amounts not attributable to common unitholders(JPY thousand)Net income attributable to common units(JPY thousand)Average number of investment units during the period(units)(Notes Related to Significant Subsequent Events)

1. Sale of Assets
INV decided on July 25, 2017 to sell the following two properties, and completed sale of all two properties on July 31, 2017.
Property Number: B08

Property Name: Kindai Kagakusha Building

Sale Date

July 31, 2017

Location

Shinjuku-ku, Tokyo

Book Value (Note 1)

JPY 1,201 million

Sales Price (Note 2)

JPY 1,361 million

Expected Gain on Sales (Note 3)

JPY 96 million

Transferee

Not disclosed (Note 4)

Legal Form of Asset

Trust beneficiary interest

Property Number: C01

Property Name: Times Kanda-Sudacho 4th

Sale Date

July 31, 2017

Location

Chiyoda-ku, Tokyo

Book Value (Note 1)

JPY 100 million

Sales Price (Note 2)

JPY 130 million

Expected Gain on Sales (Note 3)

JPY 23 million

Transferee

Wastec HOLDINGS Co., Ltd.

Legal Form of Asset

Real estate

43

(Note 1) Book value is the book value as of the sale date July 31, 2017.
(Note 2) Sales price does not include sales-related expenses, adjustments for property taxes or city planning taxes, or
national or local consumption taxes.
(Note 3) The amount of difference between sales price and book value, and after deducting expected sales-related
expenses.
(Note 4) The name of the transferee is not disclosed, as the transferee’s consent has not been obtained for disclosure.
(Note 5) For details of the sales assets, please refer to “5. Reference Information; (2) Real Estate Properties” later inthis document.

2. Acquisition of Assets
On July 25, 2017, INV resolved on additional acquisition of the exclusive elements it has yet to acquire of one hotel property
that is already in its portfolio, using the proceeds from the sales outlined in “1. Sale of Assets” to fund part of the acquisition.
Property Number: D43

Property Name: Hotel MyStays Gotanda Station

Anticipated Acquisition Date

October 31, 2017

Anticipated Acquisition Price (Note 1)

JPY 1,880 million

Location

Shinagawa-ku, Tokyo

Completion Date

August 29, 1984 (Note 2)

Legal Form of Asset

Trust beneficiary interest

SellerNot disclosed (Note 3)

Area of Additional Acquisition Portion

1,385.46m2(Note 1) Anticipated acquisition price is the total of (i) purchase price set forth in the purchase and sale agreement, (ii)
expenses with regard to the conversion work to convert to hotel rooms, (iii) transfer price of the furniture,
fixture and equipment (FF&E), and other expenses. Anticipated acquisition price does not include adjustmentsfor property taxes or city planning taxes, or national or local consumption taxes.
(Note 2) The completion date of the building of the additional acquisition portion.
(Note 3) The name of the seller is not disclosed, as the seller’s consent has not been obtained for disclosure.

44

(9)

Changes in Total Number of Investment Units Issued and Outstanding
Changes in the number of investment units issued and outstanding and unitholders’ equity from the date ofestablishment to the end of the Reporting Period are as follows.
Date

Type of Issue

Total Number of Investment
Units Issued and Outstanding
Increase

Total

Unitholders’ Equity (JPY)
Increase

Total

Reference

January 18, 2002

Private placement
for incorporation

400

400

200,000,000

200,000,000(Note 1)

December 26, 2003

Private placement

2,700

3,100

1,012,500,000

1,212,500,000(Note 2)January 9, 2004

Private Placement

1,350

4,450

506,250,000

1,718,750,000(Note 2)January 21, 2004

Private placement

1,333

5,783

499,875,000

2,218,625,000(Note 2)January 27, 2004

Private placement

267

6,050

100,125,000

2,318,750,000(Note 2)January 28, 2004

Private placement

800

6,850

300,000,000

2,618,750,000(Note 2)January 31, 2004

Private placement

266

7,116

99,750,000

2,718,500,000(Note 2)February 5, 2004

Private placement

800

7,916

300,000,000

3,018,500,000(Note 2)February 7, 2004

Private placement

1,333

9,249

499,875,000

3,518,375,000(Note 2)

May 17, 2004

Public offering

9,000

18,2493,377,250,000

6,895,625,000(Note 3)February 7, 2005

Public offering

10,65028,8993,937,667,100

10,833,292,100(Note 4)

July 31, 2006

Public offering

25,00053,8998,301,125,000

19,134,417,100(Note 5)February 1, 2010

Unit split

215,596

269,495-

19,134,417,100(Note 6)

February 1, 2010

Merger367,200

636,695-

19,134,417,100(Note 7)

711,597

1,348,292

6,999,979,689

26,134,396,789(Note 8)224,887

1,573,179

2,999,992,580

29,134,389,369(Note 9)July 29, 2011
December 20, 2013

Third-party
allotment
Third-party
allotment

July 16, 2014

Public offering

1,040,000

2,613,179

22,747,920,000

51,882,309,369(Note 10)

August 13, 2014

Third-party
allotment

55,5072,668,686

1,214,104,611

53,096,413,980(Note 11)

July 15, 2015

Public offering

500,000

3,168,686

27,970,500,000

81,066,913,980(Note 12)

August 12, 2015

Third-party
allotment

25,0003,193,686

1,398,525,000

82,465,438,980(Note 13)

March 30, 2016

Public offering

459,5123,653,198

36,123,157,344

118,588,596,324(Note 14)

22,626

3,675,824

1,778,675,112

120,367,271,436(Note 15)-

3,675,824

224,225,264

120,591,496,700(Note 16)

185,000

3,860,824

8,393,450,000

128,984,946,700(Note 17)

April 27, 2016

February 22, 2017

March 13, 2017

Third-party
allotment
Reversal of
allowance fortemporarydifferences
adjustment
Public offering

45

(Note 1)(Note 2)

INV was incorporated through a private placement at a price of JPY 500,000 per unit.
New investment units were issued in a private placement at a price of JPY 375,000 per unit to raise funds for the acquisition of
new properties.

(Note 3)New investment units were issued in a public offering at a price of JPY 395,000 per unit (JPY 375,250 after deducting theunderwriters’ discount) to raise funds for the acquisition of new properties.

(Note 4)

New investment units were issued in a public offering at a price of JPY 385,140 per unit (JPY 369,734 after deducting theunderwriters’ discount) to raise funds for the acquisition of new properties.

(Note 5)New investment units were issued in a public offering at a price of JPY 348,740 per unit (JPY 332,045 after deducting theunderwriters’ discount) to raise funds for the acquisition of new properties.

(Note 6)(Note 7)

An investment unit split of 5 units per 1 unit was conducted.
A merger by absorption pursuant to Article 147 of the Act on Investment Trusts and Investment Corporations was conducted with
LCP, with INV as the surviving entity. As a result of the merger by absorption, 4 investment units of INV (after the investment
unit split) were allotted for each LCP investment unit. The number of LCP investment units issued as of the time of the merger
by absorption was 91,800 units.

(Note 8)New investment units were issued in a third party allotment at a price of JPY 9,837 per unit to make repayment of existing loan,etc.

(Note 9)New investment units were issued in a third party allotment at a price of JPY 13,340 per unit to make repayment of existing loan,etc.

(Note 10) New investment units were issued in a public offering at a price of JPY 22,688 per unit (JPY 21,873 after deducting theunderwriters’ discount) to raise funds for the acquisition of new properties.
(Note 11) New investment units were issued in a third party allotment at a price of JPY 21,873 per unit for the purpose of cash reserve toappropriate to repayment in future borrowings.
(Note 12) New investment units were issued in a public offering at a price of JPY 57,817 per unit (JPY 55,941 after deducting theunderwriters’ discount) to raise a part of the funds for the acquisition of new properties.
(Note 13) New investment units were issued in a third party allotment at a price of JPY 55,941 per unit for the purpose of allocation to cash
reserves to be used as part of the funds for future acquisition of properties.
(Note 14) New investment units were issued in a public offering at a price of JPY 81,217 per unit (JPY 78,612 after deducting theunderwriters’ discount) to raise a part of the funds for the acquisition of new properties.
(Note 15) New investment units were issued in a third party allotment at a price of JPY 78,612 per unit for the purpose of allocation to cash
reserves to be used as a part of the funds for future acquisition of properties.
(Note 16) Reversal of allowance for temporary differences adjustment was decided at the meeting of the Board of Directors of INV held
on February 22, 2017 and the amount was incorporated into unitholders’ capital.
(Note 17) New investment units were issued in a public offering at a price of JPY 46,897 per unit (JPY 45,370 after deducting theunderwriters’ discount) to raise a part of the funds for the acquisition of new properties.

4. Change in Directors
Changes in directors are disclosed in a timely manner upon the determination of such changes.

46

5. Reference Information(1)

Composition of INV’s Assets

Type of
Purpose

Geographic area

asset

(Note 1)

Fiscal period ended December 31, 2016(as of December 31, 2016)
Percentage of
total assets(%)

Amount held
(JPY million)(Note 2)

Greater Tokyo
area
Major regional
Residences
citiesSubtotal
Greater Tokyo
area
Offices/Commercial Major regional
Facilities
citiesSubtotalRealestateGreater Tokyo
area
Major regional
Parking lots, etc.
citiesSubtotal
Greater Tokyo
area
Major
regional
HotelscitiesSubtotal
Total real estate
Greater Tokyo
area
Major regional
Residences
citiesSubtotal
Greater Tokyo
area
Offices/Commercial Major regional
Facilities
citiesReal
Subtotalestate inGreater Tokyo
trust
area
Major regional
Parking lots, etc.
citiesSubtotal
Greater Tokyo
area
Major regional
HotelscitiesSubtotal

Fiscal period ended June 30, 2017(as of June 30, 2017)
Percentage of
total assets(%)

Amount held
(JPY million)(Note 2)

-

-

-

-

-

-

-

-

-

-

-

-

704

0.3

703

0.2

-

-

-

-

704

0.3

703

0.2

100

0.0

100

0.0

-

-

-

-

100

0.0

100

0.0

-

-

2

0.0

-

-

-

-

805

0.3

2
806

0.0
0.3

51,61018.6

77,07325.2

16,225

5.8

16,0395.2

67,83524.5

93,113

30.4

7,002

2.5

6,990

2.3

5,782

2.1

5,732

1.9

12,785

4.6

12,722

4.2

-

-

-

-

-

-

-

-

-

-

-

-

102,29736.8

109,90735.9

76,21427.5

75,98824.8

178,51164.4

185,895

60.7

Total real estate in trust

259,133

93.4

291,731

95.2

Deposits and other assets

17,423

6.3

13,883

4.5

277,361

100.0

306,421100.0(259,938)(93.7)(292,537)(95.5)

Total assets (Note 3)(Note 1)
(Note 2)
(Note 3)“Greater Tokyo area” refers to Tokyo, Kanagawa, Chiba and Saitama.
“Amount held” is from the balance sheet as of the end of the reporting period and is calculated by deducting accumulated depreciationfrom the acquisition price (including acquisition related costs).
The figures indicated in parenthesis under “Total assets” show the amounts related to owned real estate.

47

Total Liabilities
Total Net Assets
Total Liabilities
and Net Assets

Fiscal period ended December 31, 2016(as of December 31, 2016)
Percentage ofAmount (JPY million)
total assets (%)
145,906
52.6

Fiscal period ended June 30, 2017(as of June 30, 2017)
Percentage ofAmount (JPY million)
total assets (%)
167,358
54.6

131,455

47.4

139,06245.4

277,361

100.0

306,421

100.0

48

(2)

Real Estate Properties
The following summarizes the real estate and real estate held in trust that INV held as of June 30, 2017.

aProperty
number(Note 1)Price and investment percentage

Name of property

A26

Nisshin Palacestage Daitabashi

A27

Nisshin Palacestage
Higashi-Nagasaki

A28

Growth Maison Gotanda

A29

Growth Maison Kameido

A30

Emerald House

A31

Harmonie Ochanomizu

A32

Suncrest Shakujii-Koen

A33

Growth Maison Shin-Yokohama

A34

Belle Face Ueno-Okachimachi

A35

Grand Rire Kameido

A36

Growth Maison Ikebukuro

A37

Growth Maison Yoga

A38

Route Tachikawa

A39

Shibuya-Honmachi Mansion

A40

City Heights Kinuta

A41

Acseeds Tower
Kawaguchi-Namiki

A42

Capital Heights Kagurazaka

BalanceAcquisition
sheet
price
Legal form
carrying(JPY
of assetvalue
million)(JPY(Note 3)
million)Location(Note 2)Trust
beneficiaryinterests(Note 7)Trust
beneficiary
5-4-1 Nagasaki, Toshima-ku, Tokyo
interests(Note 7)Trust
2-26-6 Nishi-Gotanda,
beneficiary
Shinagawa-ku, Tokyo
interests(Note 7)Trust
beneficiary
6-58-16 Kameido, Koto-ku, Tokyo
interests(Note 7)Trust
beneficiary
3-27-18 Itabashi, Itabashi-ku, Tokyo
interests(Note 7)Trust
beneficiary
2-5-5 Yushima, Bunkyo-ku, Tokyo
interests(Note 7)Trust
3-15-35 Takanodai, Nerima-ku,
beneficiaryTokyo
interests(Note 7)Trust
3-16-2 Shin-Yokohama, Kohoku-ku, beneficiary
Yokohama-shi, Kanagawa
interests(Note 7)Trust
1-27-5 Higashi-Ueno, Taito-ku,
beneficiaryTokyo
interests(Note 7)Trust
beneficiary
3-39-12 Kameido, Koto-ku, Tokyo
interests(Note 7)Trust
3-31-14 Nishi-Ikebukuro,
beneficiary
Toshima-ku, Tokyo
interests(Note 7)Trust
1-15-15 Okamoto, Setagaya-ku,
beneficiaryTokyo
interests(Note 7)Trust
3-7-6 Nishikicho, Tachikawa-shi,
beneficiaryTokyo
interests(Note 7)Trust
2-35-2 Honmachi, Shibuya-ku,
beneficiaryTokyo
interests(Note 7)Trust
beneficiary
4-13-15 Kinuta, Setagaya-ku, Tokyo
interests(Note 7)Trust
2-5-13 Namiki, Kawaguchi-shi,
beneficiary
Saitamainterests(Note 7)Trust
beneficiary71-1 Enokicho, Shinjuku-ku, Tokyo
interests(Note 7)
1-31-2 Izumi, Suginami-ku, Tokyo

49

Appraisalvalue atInvestment
the end ofpercentage
Appraiser
the period(%)(Note 6)(JPY
(Note 4)
million)(Note 5)

1,251

1,118

0.4

1,180

A

1,229

1,084

0.4

1,290

A

888

825

0.3

1,020

A

1,070

978

0.4

1,130

A

1,505

1,366

0.5

1,410

A

1,428

1,351

0.5

1,400

A

1,088

1,086

0.4

1,090

A

1,059

960

0.4

1,180

A

1,023

950

0.3

1,050

A

906

824

0.3

999

A

825

746

0.3

910

A

795

746

0.3

722

A

676

642

0.2

657

A

651

655

0.2

633

A

646

652

0.2

498

A

620

541

0.2

725

A

604

626

0.2

587

A

Property
number(Note 1)Name of property

A43

College Square Machida

A44

Belair Meguro

A45

Wacore Tsunashima I

A46

Foros Nakamurabashi

A47

Growth Maison Kaijin

A48

College Square Machiya

A51

City House Tokyo Shinbashi

A52

Winbell Kagurazaka

A53

Nishiwaseda Cresent Mansion

A54

Lexington Square Akebonobashi

A56

Casa Eremitaggio

A59

Towa City Coop Shinotsuka II

A61Bichsel Musashiseki

A62

Lexel Mansion Ueno Matsugaya

A63

Towa City Coop Sengencho

A64

Royal Park Omachi

A65

Lexington Square Haginomachi

A66

Visconti Kakuozan

A71

Lexington Square Daitabashi

A72

Lexington Square Honjo
Azumabashi

A73

AMS TOWER Minami 6-Jo

A75

Spacia Ebisu

BalanceAcquisition
sheet
price
Legal form
carrying(JPY
of assetvalue
million)(JPY(Note 3)
million)Location(Note 2)Trust
beneficiaryinterests(Note 7)Trust
beneficiary
1-2-15 Meguro, Meguro-ku, Tokyo
interests(Note 7)Trust
2-7-47 Tarumachi, Kohoku-ku,
beneficiaryinterests
Yokohama-shi, Kanagawa(Note 7)Trust
beneficiary
1-6-6 Kouyama, Nerima-ku, Tokyo
interests(Note 7)Trust
beneficiary
5-29-51 Kaijin, Funabashi-shi, Chibainterests(Note 7)Trust
beneficiary
7-3-1 Arakawa, Arakawa-ku, Tokyo
interests(Note 7)Trust
6-19-1 Shinbashi, Minato-ku, Tokyo beneficiaryinterests
Trust
6-15 Shin-Ogawacho, Shinjuku-ku,
beneficiaryTokyo
interests
Trust
3-18-9 Nishi-Waseda, Shinjuku-ku,
beneficiaryTokyo
interests
Trust
3-8 Yochomachi, Shinjuku-ku, Tokyo beneficiaryinterests
Trust
1-14-15 Nakane, Meguro-ku, Tokyo beneficiaryinterests
Trust
5-49-7 Higashi-Ikebukuro,
beneficiary
Toshima-ku, Tokyo
interests
Trust
1-22-7 Sekimachi-Kita, Nerima-ku,
beneficiaryTokyo
interests
Trust
3-10-2 Matsugaya, Taito-ku, Tokyo beneficiaryinterests
Trust
4-338-2 Sengencho, Nishi-ku,
beneficiary
Yokohama-shi, Kanagawa
interests
Trust
2-11-10 Omachi, Aoba-ku,
beneficiary
Sendai-shi, Miyagi
interests
Trust
1-15-16 Haginomachi,
beneficiary
Miyagino-ku, Sendai-shi, Miyagi
interests
Trust
2-44 Otanacho, Chikusa-ku,
beneficiary
Nagoya-shi, Aichi
interests
Trust
1-33-18 Izumi, Suginami-ku, Tokyo beneficiaryinterests
Trust
4-20-6 Higashikomagata,beneficiary
Sumida-ku, Tokyo
interests
Trust
2-5-15 Minami 6-Jo Nishi,
beneficiary
Chuo-ku, Sapporo-shi, Hokkaido
interests
Trust
3-6-22 Higashi, Shibuya-ku, Tokyo beneficiaryinterests
3-4-4 Nakamachi, Machida-shi,
Tokyo

50

Appraisalvalue atInvestment
the end ofpercentage
Appraiser
the period(%)(Note 6)(JPY
(Note 4)
million)(Note 5)

589

560

0.2

534

A

589

559

0.2

607

A

572

527

0.2

515

A

566

521

0.2

569

A

557

520

0.2

465

A

510

456

0.2

547

A

2,520

2,329

0.8

3,250

B

3,260

3,052

1.1

3,940

C

1,880

1,883

0.6

2,480

C

1,450

1,329

0.5

1,820

D

1,070

953

0.4

1,110

B

866

822

0.3

1,070

B

577

555

0.2

713

C

970

859

0.3

1,200

D

1,110

1,019

0.4

1,350

B

415

393

0.1

559

B

330

285

0.1

450

B

255

231

0.1

271

D

977

859

0.3

1,170

D

511

441

0.2

605

D

1,180

973

0.4

1,250

D

7,010

6,517

2.3

8,010

B

Property
number(Note 1)Name of property

A76

Neo Prominence

A77

Invoice Shin-Kobe Residence

A78

Cosmo Court Motomachi

A79

Revest Honjin

A80

Revest Matsubara

A81

Sun Terrace Minami Ikebukuro

A82

Alba Noritake Shinmachi

A83

Revest Meieki Minami

A84

Revest Heian

A85

Vendir Hamaotsu Ekimae

A86

Salvo Sala

A87

Excellente Kagurazaka

A88

Luna Court Edobori

A89

Winntage Kobe Motomachi

A90

Queen's Court Fukuzumi

A91

Corp Higashinotoin

A92

Belair Oimachi

A93

Siete Minami-Tsukaguchi

A94

Prime Life Sannomiya Isogami
Koen

A95

HERMITAGE NANBA WEST

A96

Century Park Shinkawa 1-bankan

A97

West Avenue

A98

Little River Honmachibashi

BalanceAcquisition
sheet
price
Legal form
carrying(JPY
of assetvalue
million)(JPY(Note 3)
million)Location(Note 2)Trust
beneficiaryinterests
Trust
3-3-8 Ikutacho Chuo-ku, Kobe-shi,
beneficiary
Hyogointerests
Trust
3-12-20 Motomachidori Chuo-ku,
beneficiary
Kobe-shi, Hyogo
interests
Trust
2-13 Toriidori Nakamura-ku,
beneficiary
Nagoya-shi, Aichi
interests
Trust
3-13-12 Matsubara Naka-ku,
beneficiary
Nagoya-shi, Aichi
interests
Trust
2-22-6 Minami-Ikebukuro,
beneficiary
Toshima-ku, Tokyo
interests
Trust
3-6-8 Noritake Shinmachi, Nishi-ku,
beneficiary
Nagoya-shi, Aichi
interests
Trust
2-13-33 Meieki-Minami,
beneficiary
Nakamura-ku, Nagoya-shi, Aichi
interests
Trust
2-13-17 Heian, Kita-ku,
beneficiary
Nagoya-shi, Aichi
interests
Trust
1-2-15 Hamaotsu, Otsu-shi, Shiga
beneficiaryinterests
Trust
2-6-21 Shimanouchi Chuo-ku,
beneficiary
Osaka-shi,Osakainterests
Trust128-1 Yamabukicho Shinjuku-ku,
beneficiaryTokyo, and other one parcel
interests
Trust
3-4-11 Edobori, Nishi-ku,
beneficiary
Osaka-shi, Osakainterests
Trust
7-2-2 Motomachidori, Chuo-ku,
beneficiary
Kobe-shi, Hyogo
interests
Trust
1-3-10 Fukuzumi, Koto-ku, Tokyo
beneficiaryinterests
380-1 Kawaranomachi,
Trust
Higashinotoindori Nijo Kudaru,
beneficiary
Nakagyo-ku, Kyoto-shi, Kyoto, andinterests
other two parcels
Trust
5-14-17 Higashi-Oi, Shinagawa-ku,
beneficiaryTokyo
interests
Trust
3-18 Minami-Tsukaguchimachi,
beneficiary
Amagasaki-shi, Hyogo
interests
Trust
4-3-23 Isogamidori, Chuo-ku,
beneficiary
Kobe-shi, Hyogo
interests
Trust
4-10-3 Sakuragawa, Naniwa-ku,
beneficiary
Osaka-shi, Osakainterests
Trust
4-1-2 Shinkawacho, Minato-ku,
beneficiary
Nagoya-shi, Aichi
interests
Trust
1-5-17 Nishi, Kunitachi-shi, Tokyo beneficiaryinterests
Trust
1-34 Honmachibashi, Chuo-ku,
beneficiary
Osaka-shi, Osakainterests
3-21-5 Shimo, Kita-ku, Tokyo

51

Appraisalvalue atInvestment
the end ofpercentage
Appraiser
the period(%)(Note 6)(JPY
(Note 4)
million)(Note 5)

1,660

1,614

0.6

1,980

B

1,260

1,182

0.4

1,420

B

973

908

0.3

1,080

B

674

628

0.2

809

B

657

616

0.2

793

B

625

595

0.2

755

B

608

566

0.2

733

B

597

557

0.2

746

B

595

555

0.2

693

B

581

535

0.2

726

B

544

510

0.2

642

B

543

517

0.2

635

B

525

492

0.2

570

B

512

475

0.2

606

B

456

436

0.2

603

B

446

421

0.1

514

B

412

395

0.1

505

B

374

354

0.1

446

B

373

350

0.1

434

B

355

336

0.1

433

B

335

324

0.1

428

B

331

313

0.1

323

B

310

295

0.1

395

B

Property
number(Note 1)

A99

BalanceAcquisition
sheet
price
Legal form
carrying(JPY
of assetvalue
million)(JPY(Note 3)
million)Location(Note 2)Name of property

2-25-11 Mikage Tsukamachi,
Higashinada-ku, Kobe-shi, Hyogo

Prime Life Mikage

A100 City Court Kitaichijo

1-6-3 Kita 1-jo Higashi, Chuo-ku,
Sapporo-shi, Hokkaido

A101 Lieto Court Mukojima

5-45-10 Mukojima, Sumida-ku,
Tokyo

A102 Lieto Court Nishi-Ojima

2-41-14 Ojima, Koto-ku, Tokyo

A103 Royal Parks Momozaka

5-38 Fudegasakicho, Tennouji-ku,
Osaka-shi, Osaka

A104 Royal Parks Shinden

3-35-20 Shinden, Adachi-ku, Tokyo

A105 Royal Parks Tower Minami-Senju

4-7-3 Minami-Senju, Arakawa-ku,
Tokyo

A106 Royal Parks Seasir Minami-Senju

3-41-7 Minami-Senju, Arakawa-ku,
Tokyo

Trust
beneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests

Subtotal (70 properties)

Appraisalvalue atInvestment
the end ofpercentage
Appraiser
the period(%)(Note 6)(JPY
(Note 4)
million)(Note 5)

297

279

0.1

337

B

1,782

1,813

0.6

1,930

B

1,683

1,718

0.6

1,730

B

1,634

1,661

0.5

1,720

B

2,910

2,951

1.0

3,050

C

5,024

5,133

1.7

5,440

C

21,87922,933

7.3

22,600

B

2,683

2,825

0.9

2,710

B

95,678

93,11332.0

104,752-

B08

Kindai Kagakusha Building

2-7-15 Ichigaya-Tamachi,
Shinjuku-ku, Tokyo

Trust
beneficiaryinterests

1,301

1,197

0.4

1,060

A

B09

Shinjuku Island

6-5-1 Nishi-Shinjuku, Shinjuku-ku,
TokyoReal estate

715

703

0.2

545

C

B14

Lexington Plaza Nishigotanda

5-2-4 Nishi-Gotanda,
Shinagawa-ku, Tokyo

4,880

4,662

1.6

4,250

B

B15

Cross Square NAKANO

5-24-18 Nakano, Nakano-ku, Tokyo

1,060

1,129

0.4

1,090

B

B16

Ohki Aoba Building

9-7 Futsukamachi, Aoba-ku,
Sendai-shi, Miyagi

816

731

0.3

691

D

B17

Lexington Plaza Hachiman

3-1-50 Hachiman, Aoba-ku,
Sendai-shi, Miyagi

3,280

3,086

1.1

3,610

C

B18

AEON TOWN Sukagawa

105 Furukawa, Sukagawa-shi,
Fukushima

2,320

1,914

0.8

2,370

C

14,372

13,426

4.8

13,616

-

97

100

0.0

113

A

97

100

0.0

113

-

2,851

3,043

1.0

5,260

B

2,584

2,568

0.9

5,340

B

6,024

5,799

2.0

15,600

B

4,930

4,740

1.6

7,140

B

4,870

4,697

1.6

6,690

B

Trust
beneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests

Subtotal (7 properties)

C01

Times Kanda-Sudacho 4th

1-22-7, 1-22-15 Kanda sudacho,
Chiyoda-ku, Tokyo

Real estate

Subtotal (1 property)

D01

Hotel MyStays Kanda

1-2-2 Iwamotocho, Chiyoda-ku,
Tokyo

D02

Hotel MyStays Asakusa

1-21-11 Honjo, Sumida-ku, Tokyo

D03

Hotel MyStays Kyoto-Shijo

52, Kasabokocho, Higashiiru,
Aburanokoji, Shijyodori,Shimogyo-ku, Kyoto-shi, Kyoto

D04

MyStays Shin-Urayasu Conference
2-1-4 Akemi, Urayasu-shi, Chiba
CenterD05

Hotel MyStays Maihama

3-5-1 Tekkodori, Urayasu-shi,
Chiba

52

Trust
beneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests

Property
number(Note 1)

D06

D07

D08

D09

D10

D11

D12

D13

D14

D15

D16

D17

D18

D19

D20

D21

D22

D23

D24

D25

D26

D27

D28

D29

Name of property

BalanceAcquisition
sheet
price
Legal form
carrying(JPY
of assetvalue
million)(JPY(Note 3)
million)Location(Note 2)Trust
beneficiaryinterests
Trust
2-23-22 Higashi-Sakura, Naka-ku,
Hotel MyStays Nagoya-Sakae
beneficiary
Nagoya-shi, Aichi
interests
Trust
Hotel MyStays
1-4-8 Awaji-machi, Chuo-ku,
beneficiary
Sakaisuji-Honmachi
Osaka-shi, Osakainterests
Trust
4-81 Sueyoshicho, Naka-ku,
Hotel MyStays Yokohama
beneficiary
Yokohama-shi, Kanagawa
interests
Trust
5-43-7 Higashi-Nippori,
Hotel MyStays Nippori
beneficiaryArakawa-ku, Tokyo
interests
Trust
Hotel MyStays
3-14-20 Haruyoshi, Chuo-ku,
beneficiary
Fukuoka-Tenjin-Minami
Fukuoka-shi, Fukuoka
interests
Trust
3-26 Shin-Ogawamachi,
Flexstay Inn Iidabashi
beneficiary
Shinjuku-ku, Tokyo
interests
Trust
Hotel MyStays Ueno Inaricho
1-5-7 Matsugaya, Taito-ku, Tokyo
beneficiaryinterests
Trust
1-22-19 Kita-Shinagawa,Flexstay Inn Shinagawa
beneficiary
Shinagawa-ku, Tokyo
interests
Trust
1-52-5 Tokiwadai, Itabashi-ku,
Flexstay Inn Tokiwadai
beneficiaryTokyo
interests
Trust
Flexstay Inn Sugamo
3-6-16 Sugamo, Toshima-ku, Tokyo beneficiaryinterests
Trust
1-3-2 Tokuicho, Chuo-ku,
Hotel MyStays Otemae
beneficiary
Osaka-shi, Osakainterests
Trust
Flexstay Inn Kiyosumi Shirakawa 1-12-16 Tokiwa, Koto-ku, Tokyo
beneficiaryinterests
Trust
4-27-12 Futaba, Shinagawa-ku,
Flexstay Inn Nakanobu P1
beneficiaryTokyo
interests
Trust
4-27-8 Futaba, Shinagawa-ku,
Flexstay Inn Nakanobu P2
beneficiaryTokyo
interests
Trust
3-37-2 Sumiyoshicho, Naka-ku,
APA Hotel Yokohama-Kannai
beneficiary
Yokohama-shi, Kanagawa
interests
Trust
26-17 Honcho, Hakodate-shi,
Hotel Nets Hakodate
beneficiary
Hokkaido
interests
Trust
5-10-15 Shirokane, Minato-ku,
Flexstay Inn Shirogane
beneficiaryTokyo
interests
Trust
Hotel MyStays Haneda
5-1-13 Haneda, Ota-ku, Tokyo
beneficiaryinterests
Trust
Hotel MyStays Kameido P1
6-32-1 Kameido, Koto-ku, Tokyo
beneficiaryinterests
Trust
5-5-13 Higashi-Ueno, Taito-ku,
Hotel MyStays Ueno Iriyaguchi
beneficiaryTokyo
interests
Trust
Hotel MyStays Kameido P2
6-7-8 Kameido, Koto-ku, Tokyo
beneficiaryinterests
Trust
1-23 Masagocho, Shimizu-ku,
Hotel Vista Shimizu
beneficiary
Shizuoka-shi, Shizuoka
interests
Trust
Super Hotel Shinbashi/
5-16-4 Shinbashi, Minato-ku, Tokyo beneficiaryKarasumoriguchiinterests
Hotel Vista Premio Dojima(Note 8)2-4-1 Sonezakishinchi, Kita-ku,
Osaka

53

Appraisalvalue atInvestment
the end ofpercentage
Appraiser
the period(%)(Note 6)(JPY
(Note 4)
million)(Note 5)

3,845

3,677

1.3

7,370

B

2,958

2,756

1.0

5,850

B

2,514

2,445

0.8

8,430

B

2,119

2,031

0.7

3,500

B

1,898

1,834

0.6

3,450

B

1,570

1,530

0.5

4,720

B

1,381

1,362

0.5

2,130

B

1,331

1,279

0.4

2,480

B

1,242

1,216

0.4

2,130

B

1,242

1,224

0.4

2,260

B

1,192

1,151

0.4

2,170

B

1,192

1,163

0.4

4,710

B

749

733

0.3

1,320

B

589

575

0.2

837

B

283

283

0.1

403

B

8,350

8,041

2.8

9,650

B

2,792

2,682

0.9

3,720

B

2,119

2,104

0.7

2,310

B

7,801

7,585

2.6

8,490

B

5,594

5,490

1.9

7,140

B

3,821

3,760

1.3

4,370

B

3,742

3,660

1.3

4,840

B

2,198

2,124

0.7

2,450

B

1,624

1,613

0.5

1,790

B

Property
number(Note 1)

D30

D31

D32

D33

D34

D35

D36

D37

D38

D39

D40

D41

D42

D43

D44

D45

D46

D47

D48

D49

BalanceAcquisition
sheet
price
Legal form
carrying(JPY
of assetvalue
million)(JPY(Note 3)
million)Location(Note 2)Name of property

Trustbeneficiaryinterests
Trust
2-4-1 Higashi-Shukugo,
Hotel MyStays Utsunomiya
beneficiary
Utsunomiya-shi, Tochigi
interests
Trust
1-13-2 Kaizuka, Kawasaki-ku,
Flexstay Inn Kawasaki-Kaizuka
beneficiary
Kawasaki-shi, Kanagawa
interests
Trust
1-3-2 Takara-machi, Toyama-shi,
Comfort Hotel Toyama
beneficiary
Toyamainterests
Trust
15-9 Ogawacho, Kawasaki-ku,
Flexstay Inn Kawasaki-Ogawacho
beneficiary
Kawasaki-shi, Kanagawa
interests
Trust
Flexstay Inn Ekoda
8-6 Sakaecho, Nerima-ku, Tokyo
beneficiaryinterests
Trust
Super Hotel Tokyo-JR Tachikawa 2-21-9 Akebonocho, Tachikawa-shi,
beneficiary
KitaguchiTokyointerests
Trust
Super Hotel JR Ueno-iriyaguchi
7-9-14 Ueno, Taito-ku, Tokyo
beneficiaryinterests
Trust
1-9-30 Nishi-Shinsaibashi,
Hotel MyStays Shinsaibashi
beneficiary
Chuo-ku, Osaka-shi, Osakainterests
Trust
3-13-13 Kurosaki, Yahatanishi-ku,
Comfort Hotel Kurosaki
beneficiary
Kitakyusyu-shi, Fukuoka
interests
Trust
2-18-14 Omotecho, Maebashi-shi,
Comfort Hotel Maebashi
beneficiary
Gunmainterests
Trust
Comfort Hotel Tsubame-Sanjo
2-115 Sugoro, Sanjo-shi, Niigata
beneficiaryinterests
Trust
3-4 Ohdori-Nishi, Kitami-shi,
Comfort Hotel Kitami
beneficiary
Hokkaido
interests
Trust
2-6-8 Nishi-Gotanda,
Hotel MyStays Gotanda Station
beneficiary
Shinagawa-ku, Tokyo
interests
1-10 Kaidoue (and 59 other land
Trust
Hotel Epinard Nasu
parcels), Oaza-Takakuhei,
beneficiaryNasu-machi, Nasu-gun, Tochigi
interests
Trust
3-5-7 Tenjin, Chuo-ku, Fukuoka-shi,
Hotel MyStays Fukuoka Tenjin
beneficiary
Fukuokainterests
Trust
1-18-14 Hamamatsucho, Minato-ku,
Hotel MyStays Hamamatsucho
beneficiaryTokyo
interests
Trust
2-13-1 Hirooka, Kanazawa-shi,
Hotel MyStays Premier Kanazawa
beneficiary
Ishikawa
interests
Trust
9-9 Hyogomachi, Takamatsu-shi,
Takamatsu Tokyu REI Hotelbeneficiary
Kagawainterests
Trust
Hotel MyStays Premier
1-8-5 Hamamatsucho, Minato-ku,
beneficiary
HamamatsuchoTokyo
interests
Flexstay Inn Higashi-Jujo

2-10-2 Nakajujo, Kita-ku, Tokyo

Appraisalvalue atInvestment
the end ofpercentage
Appraiser
the period(%)(Note 6)(JPY
(Note 4)
million)(Note 5)

1,277

1,271

0.4

1,430

B

1,237

1,235

0.4

1,380

B

980

953

0.3

1,180

B

979

956

0.3

1,090

B

906

891

0.3

1,060

B

5,069

4,971

1.7

5,030

B

1,170

1,148

0.4

1,230

E

1,130

1,115

0.4

1,220

E

3,160

3,124

1.1

3,410

B

1,148

1,121

0.4

1,210

E

1,128

1,119

0.4

1,170

E

1,010

995

0.3

1,060

E

851

832

0.3

901

E

24,674

24,6268.2

24,800C

20,981

20,7447.0

22,000

C

8,059

7,989

2.7

8,280

C

7,959

7,916

2.7

7,760

C

13,761

13,561

4.6

14,000

C

2,139

2,126

0.7

2,170

E

8,000

8,016

2.7

8,090

B

Subtotal (49 properties)

189,032

185,89763.2

245,021-

Total (127 properties)

299,181292,537100.0

363,502-54

(Note 1)“Property number” indicates the use categorization of properties acquired by INV, with “A” standing for residence, “B” standing for officeand commercial facility, “C” standing for parking lots and “D” standing for hotel, and the number assigned for each property. The number
following “A”, “B”, “C” and “D” is assigned based on how early the acquisition was made, except that for acquisitions made at the same timea lower number is assigned to the property with a greater acquisition price.

(Note 2)

“Location” is, in principle, based on the indicated address (jyukyohyoji), except that if the jyukyohyoji system has not been implemented forsuch property, the location is based on the land number (chiban).

(Note 3)

“Acquisition price” is the purchase price indicated in the real estate or trust beneficiary purchase agreement.
consumption tax and other taxes, and has been rounded down to the nearest million yen.

(Note 4)

“Investment percentage” is the ratio of the acquisition price to the aggregate acquisition price of INV’s portfolio, and has been rounded to thefirst decimal place.

(Note 5)

“Appraisal value at the end of the period” is the value appraised or determined based on research by the real estate appraiser as of the end of
the fiscal period in accordance with the Articles of Incorporation of INV and the regulations of The Investment Trust Association, Japan.

(Note 6)

“Appraiser” is shown in code in the table above.

Such price excludes

The code used to represent the appraisers is as follows:

Appraiser
A: Assets Research and Development Inc.
B: Japan Real Estate Institute
C: Morii Appraisal & Investment Consulting Inc.
D: The Tanizawa Sogo Appraisal Co., Ltd.
E: Daiwa Real Estate Appraisal Co., Ltd.
(Note 7)

Individual trust beneficiary interests were integrated into three groups with other trust beneficiary interests when INV procured funds throughdebt financing backed by trust assets in July 2011. The grouping of trust beneficiary interests at the end of the fiscal period ended June 30,
2017 is as follows:
Group 1
Nisshin Palacestage Daitabashi, Nisshin Palacestage Higashi-Nagasaki, Growth Maison Shin-Yokohama, Belle Face Ueno-Okachimachi,
Growth Maison Yoga, Shibuya-Honmachi Mansion, City Heights Kinuta, and Foros Nakamurabashi
Group 2Growth Maison Gotanda, Growth Maison Kameido, Emerald House, Growth Maison Ikebukuro,
Route Tachikawa, College Square Machida, Belair Meguro, and Wacore Tsunashima I
Group 3Harmonie Ochanomizu, Suncrest Shakujii-Koen, Grand Rire Kameido, Acseeds Tower Kawaguchi-Namiki,
Capital Heights Kagurazaka, Growth Maison Kaijin, and College Square Machiya(Note 8)With change of the operator, the property name was changed to Hotel MyStays Dojima on August 1, 2017.
in this document.

55

The same shall apply hereinafterbCapital expenditures for assets under management(a) Schedule for capital expenditures
The schedule for the principal capital expenditures for property maintenance construction, etc., as of the end of the
fiscal period for the real estate assets is as follows.
Estimated Cost (JPY thousand)Name of Property

Location

PurposeScheduled Time of
Implementation

Total

Payment for
the Fiscal
Advance
Period ended
Payments
June 30,
2017

A53

Nishiwaseda Cresent Shinjuku-ku,
MansionTokyo

Outer wall repair
work

From July 2017
To December 201785,000――

A54

Lexington Square
Akebonobashi

Shinjuku-ku,
Tokyo

Outer wall repair
work

From July 2017
To December 201749,300――

D44 Hotel Epinard Nasu

Nasu-gun,Tochigi

Annex tower guest
room repair andmaintenance

From July 2017
To December 201737,500――Hotel MyStays
Nagoya-Sakae

Nagoya-shi,
Aichi

Boiler equipment
replacement

From July 2017
To December 2017

32,000――D35 Flexstay Inn Ekoda

Nerima-ku,
Tokyo

Conversion of guest
rooms tonon-smoking

From July 2017
To December 2017

31,000――D07(b) Capital expenditures for the fiscal period ended June 30, 2017
The principal construction work constituting capital expenditures for the real estate assets for the fiscal period ended
June 30, 2017 is as follows. Capital expenditures for the fiscal period totaled JPY 898,213 thousand, and together
with JPY 22,022 thousand in repair costs included in this fiscal period’s expenses, construction work totaling JPY
920,236 thousand was implemented.
Name of property

Location

PurposeTime ofimplementation

Payment(JPY thousand)

D44 Hotel Epinard Nasu

Nasu-gun,Tochigi

Renovation work

From January 2017
To June 2017

406,088

D02

Hotel MyStays
Asakusa

Sumida-ku,
Tokyo

Conversion of guest rooms to
non-smoking

From January 2017
To June 2017

20,072

B15

Cross Square
NAKANO

Nakano-ku,
TokyoParking lot repair work

From January 2017
To June 201715,900D03

Hotel MyStays
Kyoto-Shijo

Kyoto-shi,
Kyoto

Conversion of guest rooms to
non-smoking

From January 2017
To June 201713,212

D08

Hotel MyStays
Sakaisuji-Honmachi

Osaka-shi,
Osaka

Conversion of guest rooms to
non-smoking

From January 2017
To June 2017

10,906

Other construction

432,033
Total

898,21356

(c) Reserved funds for long-term maintenance plan (repair reserves)
INV has reserved funds from the cash flow of the fiscal period, as shown below, towards large-scale maintenancerepairs in the medium- to long-term in accordance with the long-term maintenance plan for each property.

Fiscal period

Reserved funds at beginningof period
Amount reserved(Note)
Amount reversed(Note)
Amount carried over for
next fiscal period(Note)(Unit: JPY thousand)
24th
25th
26th
27th
28th
fiscal period
fiscal period
fiscal period
fiscal period
fiscal period
From January 1, From July 1, 2015 From January 1, From July 1, 2016 From January 1,
2015 to June 30, to December 31, 2016 to June 30, to December 31, 2017 to June 30,
2017
2016
2016
2015
2015
738,365

852,699

982,750

1,303,685

1,397,286

283,147

352,490543,275

446,066

468,145

168,813

222,439

222,339

352,464

468,189852,699

982,750

1,303,685

1,397,286

1,397,243

The amount reserved for the relevant fiscal period includes the reserves for acquired properties, and the amount reversed includes
the reserves for disposed properties.

57

c

Condition of income, etc. (from January 1, 2017 to June 30, 2017)(Unit: JPY thousand)

Property
No.

Property Name

Total ofrentalrevenue(i)Rent,commonarea fees

Total ofrentalFacility
relatedTaxes andexpenses management public dues
fee
(ii)

Other
incomeInsurance
expenses

Depreciation
expenses
(iii)

Other
expensesProfit andLoss((i)-(ii))NOI((i)-(ii)+(iii))

A26

Nisshin Palacestage Daitabashi

39,18736,026

3,160

19,177

6,492

1,621

44

8,960

2,057

20,01028,970

A27

Nisshin Palacestage
Higashi-Nagasaki

46,59842,295

4,303

22,943

5,190

2,679

68

13,286

1,718

23,65436,941A28

Growth Maison Gotanda

27,33926,772

567

8,237

1,974

1,324

27

4,397

514

19,102

23,500A29

Growth Maison Kameido

33,02430,813

2,211

13,967

3,793

1,681

38

5,952

2,501

19,05725,009A30

Emerald House

49,146

39,164

9,982

24,805

8,072

2,552

71

9,277

4,829

24,341

33,619A31

Harmonie Ochanomizu

41,93838,784

3,153

15,747

3,897

1,891

40

7,624

2,293

26,19133,815

A32

Suncrest Shakujii-Koen

39,07433,488

5,585

17,901

3,774

3,124

65

8,824

2,112

21,172

29,996A33

Growth Maison Shin-Yokohama

35,75233,366

2,385

15,442

3,895

2,408

49

6,194

2,894

20,30926,504

A34

Belle Face Ueno-Okachimachi

33,733

29,100

4,632

14,985

5,040

1,658

35

5,355

2,895

18,747

24,102

A35

Grand Rire Kameido

26,61926,619

8,199

431

1,722

39

5,506

500

18,41923,926A36

Growth Maison Ikebukuro

26,872

25,238

1,633

10,035

2,500

1,046

26

5,321

1,139

16,83622,158A37

Growth Maison Yoga

22,08020,990

1,089

9,855

2,581

1,368

26

4,167

1,710

12,225

16,392

A38

Route Tachikawa

21,61819,256

2,362

8,463

1,942

1,069

28

4,354

1,067

13,155

17,510

A39

Shibuya-Honmachi Mansion

20,042

19,373

669

6,329

1,738

930

23

1,969

1,667

13,713

15,683

A40

City Heights Kinuta

17,146

16,362

783

5,672

1,739

981

21

1,944

985

11,473

13,418A41

Acseeds Tower Kawaguchi-Namiki

25,11022,995

2,115

13,011

2,807

1,122

29

5,038

4,014

12,09817,137

A42

Capital Heights Kagurazaka

19,885

17,917

1,967

7,126

1,932

1,087

25

2,630

1,450

12,75815,389

A43

College Square Machida

17,484

17,484

3,100

164

512

25

1,898

500

14,383

16,282

A44

Belair Meguro

16,06515,089

975

5,996

1,535

876

17

2,348

1,218

10,06912,417

A45

Wacore Tsunashima I

17,917

16,786

1,130

8,657

2,097

884

23

3,988

1,663

9,260

13,248

A46

Foros Nakamurabashi

18,425

16,475

1,950

10,150

2,534

987

22

4,974

1,631

8,274

13,249A47

Growth Maison Kaijin

22,69921,037

1,661

12,933

3,189

2,102

54

6,531

1,054

9,766

16,298

A48

College Square Machiya

14,706

14,706

932

18

3,551

500

9,703

13,254

A51

City House Tokyo Shinbashi

90,99685,9495,047

35,792

13,116

4,950

84

13,283

4,356

55,204

68,487

A52

Winbell Kagurazaka

105,442

97,0168,426

37,888

8,355

6,365

150

16,681

6,334

67,554

84,236

A53

Nishiwaseda Cresent Mansion

74,33869,8984,440

23,354

6,812

3,625

104

8,655

4,156

50,984

59,639

A54

Lexington Square Akebonobashi

52,492

48,104

4,388

18,900

4,947

2,216

42

8,757

2,936

33,59142,349

A56

Casa Eremitaggio

32,586

29,8402,745

14,713

2,813

1,652

32

9,221

993

17,872

27,094

A59

Towa City Coop Shinotsuka II

33,86532,721

1,143

14,224

4,865

1,400

38

5,403

2,516

19,641

25,044

A61

Bichsel Musashiseki

23,233

21,552

1,681

13,679

5,558

1,181

33

3,141

3,764

9,553

12,695

A62

Lexel Mansion Ueno Matsugaya

35,106

31,078

4,027

16,982

4,381

1,866

41

8,553

2,138

18,123

26,677

A63

Towa City Coop Sengencho

55,627

51,1004,526

28,874

14,985

3,001

75

7,544

3,267

26,752

34,297

A64

Royal Park Omachi

26,332

23,052

3,279

12,681

4,653

1,591

43

4,792

1,600

13,65018,442

A65

Lexington Square Haginomachi

17,161

15,553

1,607

8,640

2,019

1,142

27

3,550

1,900

8,520

12,071

A66

Visconti Kakuozan

10,73010,019

711

7,240

3,439

921

16

1,733

1,128

3,490

5,223

A71

Lexington Square Daitabashi

31,57430,2201,353

14,586

2,881

1,545

30

8,039

2,090

16,98825,027

A72

Lexington Square Honjo Azumabashi

17,807

16,253

1,554

10,367

2,986

814

21

5,037

1,508

7,440

12,477

A73

AMS TOWER Minami 6-Jo

44,90543,316

1,589

24,587

6,045

2,141

87

14,123

2,189

20,31834,441

A75

Spacia Ebisu

214,592

188,067

26,52467,49010,3788,818

171

37,964

10,158147,101

185,065

A76

Neo Prominence

62,85254,485

8,367

24,322

9,150

3,551

110

9,993

1,517

38,53048,523

A77

Invoice Shin-Kobe Residence

45,53841,534

4,004

22,189

3,962

2,707

64

11,4903,965

23,34934,839

A78

Cosmo Court Motomachi

35,22733,3771,850

18,613

3,998

2,305

65

9,984

2,260

16,613

26,597

A79

Revest Honjin

32,201

29,935

2,266

13,721

3,046

1,802

47

7,464

1,360

18,48025,944

A80

Revest Matsubara

29,23026,6952,534

14,876

3,646

1,869

43

7,071

2,245

14,354

21,426

A81

Sun Terrace Minami Ikebukuro

22,564

20,496

2,068

10,505

2,924

919

26

5,212

1,420

12,05917,272

A82

Alba Noritake Shinmachi

25,262

23,400

1,862

12,965

2,863

1,736

44

6,945

1,375

12,297

19,243

A83

Revest Meieki Minami

26,28924,1552,134

13,880

3,576

1,664

44

6,974

1,620

12,40919,383

A84

Revest Heian

23,712

22,516

1,196

13,224

3,282

1,402

32

6,419

2,087

10,48816,908A85

Vendir Hamaotsu Ekimae

33,17830,4472,730

16,609

5,040

1,961

60

7,013

2,533

16,56923,582

A86

Salvo Sala

25,11323,652

1,460

11,311

3,008

1,552

37

5,444

1,268

13,801

19,246

A87

Excellente Kagurazaka

18,775

17,594

1,180

9,082

2,333

769

23

4,196

1,760

9,692

13,888A88

Luna Court Edobori

20,54819,605943

11,501

3,404

1,186

31

5,076

1,802

9,047

14,124

A89

Winntage Kobe Motomachi

20,08019,702378

12,106

2,360

1,587

39

5,824

2,295

7,973

13,797

A90

Queen's Court Fukuzumi

17,35016,321

1,028

6,633

1,482

748

22

3,205

1,173

10,717

13,923

A91

Corp Higashinotoin

18,292

17,081

1,211

10,364

3,410

920

28

3,799

2,205

7,927

11,726

-

-

-

5,002

58

-

Property
No.

Property Name

Total ofrentalrevenue(i)Rent,commonarea fees

Other
incomeTotal ofrentalFacility
relatedTaxes andexpenses management public dues
fee
(ii)

Depreciation

Insurance
expenses

expenses(iii)

Profit andLoss((i)-(ii))

OtherexpensesNOI((i)-(ii)+(iii))

A92

Belair Oimachi

15,291

13,793

1,497

7,760

2,664

672

18

2,675

1,729

7,531

10,206

A93

Siete Minami-Tsukaguchi

17,206

16,002

1,204

8,227

2,499

982

28

3,240

1,477

8,979

12,219A94

Prime Life Sannomiya Isogami Koen

14,025

13,228

797

7,334

1,511

848

20

3,426

1,528

6,690

10,117A95

HERMITAGE NANBA WEST

15,54914,405

1,144

9,505

2,136

1,006

24

3,446

2,891

6,044

9,491

A96

Century Park Shinkawa 1-bankan

17,688

14,668

3,020

8,761

2,416

874

33

4,114

1,323

8,927

13,041

A97

West Avenue

12,175

11,624

551

7,078

2,154

564

18

3,086

1,255

5,096

8,183

A98

Little River Honmachibashi

13,45913,180

278

7,301

2,229

951

22

2,874

1,223

6,158

9,032

A99

Prime Life Mikage

12,663

11,192

1,471

6,986

1,787

762

18

2,967

1,449

5,677

8,644

A100

City Court Kitaichijo

65,41159,566

5,845

36,400

8,770

2,572

129

22,5872,340

29,011

51,598

A101

Lieto Court Mukojima

54,123

51,2702,853

27,839

6,888

2,507

70

15,356

3,017

26,284

41,640

A102

Lieto Court Nishi-Ojima

48,43747,484952

20,649

4,312

2,172

55

12,272

1,836

27,78840,060A103

Royal Parks Momozaka

140,320

129,478

10,842

89,61840,1463,899

196

44,963412

50,702

95,666

A104

Royal Parks Shinden

214,749

200,266

14,482

112,779

34,556

7,087

386

70,022726

101,970

171,992

A105

Royal Parks Tower Minami-Senju

426,286

398,766

27,519260,401

66,461-

620

180,240

13,079165,884

346,124

A106

Royal Parks Seasir Minami-Senju

55,95852,0093,949

33,056

9,371

-

99

23,341244

22,901

46,243

B08

Kindai Kagakusha Building

36,91331,987

4,925

25,3996,402

52

10,8183,616

11,514

22,332

4,508

B09

Shinjuku Island

B14

Lexington Plaza Nishigotanda

144,100

128,236

15,86365,21324,289Not disclosed (Note 1)
12,267

141

26,557

1,957

78,886

105,444

B15

Cross Square NAKANO

43,43137,0206,410

16,130

6,118

3,864

60

4,849

1,238

27,30032,150

B16

Ohki Aoba Building

34,84427,245

7,598

21,698

9,265

4,056

74

7,197

1,104

13,145

20,343

B17

Lexington Plaza Hachiman

161,712

131,525

30,18776,62743,024

11,264

151

21,432754

85,085

106,518

B18

AEON TOWN Sukagawa

141,715

141,715-

93,76956,124

7,385

203

29,438616

47,946

77,385

C01

Times Kanda-Sudacho 4th

2,700

2,700

-

260

-

259

D01

Hotel MyStays Kanda

105,509105,509-28,826

-

4,708

D02

Hotel MyStays Asakusa

116,739

116,739-

20,535-

D03

Hotel MyStays Kyoto-Shijo

321,887

321,887-

60,507-

D04

MyStays Shin-Urayasu ConferenceCenter175,921

175,921-50,598-

D05

Hotel MyStays Maihama

134,694

134,694-

39,563-

D06

Hotel Vista Premio Dojima

202,987

202,987-

57,591

D07

Hotel MyStays Nagoya-Sakae

188,852

188,852-

69,107

-

1

-

2,439

2,440

76,683

100,22962

23,546

509

3,871

80

16,066517

96,204112,270

10,399232

49,357518

261,379

310,736

8,161

139

41,790507

125,323

167,1133,194

73

35,784510

95,131130,916

8,208

11,667

192

37,011

511

145,396

182,408

17,163

4,592

167

46,673

510

119,744

166,418

D08

Hotel MyStays Sakaisuji-Honmachi

161,661

161,661-

27,280

-

6,399

94

20,277508

134,381

154,658

D09

Hotel MyStays Yokohama

108,321

108,321-29,367

-

4,477

137

24,236515

78,954

103,190

D10

Hotel MyStays Nippori

59,954

59,954-

17,441

-

1,760

47

15,127506

42,512

57,639D11

Hotel MyStays
Fukuoka-Tenjin-Minami

133,097

133,097-

19,763

-

5,078

73

14,105506

113,333

127,439

D12

Flexstay Inn Iidabashi

50,70250,702-

14,428

-

4,501

62

9,355

508

36,27445,630D13

Hotel MyStays Ueno Inaricho

55,09655,096-

13,048

-

1,472

33

11,037505

42,04853,085

D14

Flexstay Inn Shinagawa

47,79547,795

-

8,248

-

1,661

27

6,054

504

39,54745,601

D15

Flexstay Inn Tokiwadai

59,29759,297-

11,153

-

3,415

57

7,175

504

48,14455,320

D16

Flexstay Inn Sugamo

56,65456,654-

14,428

-

2,869

46

11,006505

42,22653,233

D17

Hotel MyStays Otemae

124,567

124,567-

13,147

-

3,608

83

8,950

504

111,420

120,370

D18

Flexstay Inn Kiyosumi Shirakawa

40,634

40,634-

11,620

-

3,390

53

7,672

503

29,01436,686

D19

Flexstay Inn Nakanobu P1

20,795

20,795

-

5,029

-

953

17

3,555

503

15,76519,321

D20

Flexstay Inn Nakanobu P2

11,168

11,168

-

2,800

-

527

10

1,756

505

8,368

10,125D21

APA Hotel Yokohama-Kannai

230,016230,016-

88,581-

11,825

213

76,039503

141,434

217,473

D22

Hotel Nets Hakodate

112,960

112,960-

37,427

-

5,167

130

31,617511

75,532

107,150

D23

Flexstay Inn Shirogane

59,74059,740

-

9,891

-

1,911

39

7,433

507

49,84957,283

D24

Hotel MyStays Haneda

182,340

182,340-

67,941

-

8,127

160

59,245

408

114,399

173,644

D25

Hotel MyStays Kameido P1

174,873

174,873-

40,436

-

6,382

130

33,519404

134,436

167,955

D26

Hotel MyStays Ueno Iriyaguchi

95,31595,315-24,734

1,236

65

20,569408

70,581

91,150D27

Hotel MyStays Kameido P2

118,142

118,142-

30,235

3,834

81

25,912405

87,907

113,820

D28

Hotel Vista Shimizu

76,06676,062

4

29,108

635

6,165

69

21,829409

46,95868,787

D29Super Hotel
Shinbashi/ Karasumoriguchi

39,42639,426

-

8,965

706

3,103

29

4,717

407

30,46135,179

2,455
-

D30

Flexstay Inn Higashi-Jujo

40,45840,458

-

8,044

-

1,943

37

5,655

408

32,41338,068

D31

Hotel MyStays Utsunomiya

89,47889,478-32,200-13,727239

17,818415

57,27775,096

D32

Flexstay Inn Kawasaki-Kaizuka

32,05432,054-

11,846

889

820

29

9,700

406

20,20829,908

D33

Comfort Hotel Toyama

35,92835,928-13,159

55

3,780

60

8,853

410

22,76831,62159

Property
No.

Property Name

Total ofrentalrevenue(i)Rent,commonarea fees

Total ofrentalFacility
relatedTaxes andexpenses management public dues
fee
(ii)

Other
incomeInsurance
expenses

Depreciation
expenses
(iii)

Other
expensesProfit andLoss((i)-(ii))NOI((i)-(ii)+(iii))

D34

Flexstay Inn Kawasaki-Ogawacho

25,87725,877

-

7,175

-

964

20

5,785

405

18,701

24,486

D35

Flexstay Inn Ekoda

115,682

115,682-

37,290

-

4,679

83

32,123404

78,391

110,515

D36

Super Hotel Tokyo-JR Tachikawa
Kitaguchi

31,787

31,787-

13,142

1,391

2,820

39

8,482

408

18,644

27,127

1,070

2,141

27

6,346

408

17,281

23,6271,436

4319,052409

61,54380,595

D37Super Hotel JR Ueno-iriyaguchi

27,27527,275

-

9,994

D38

Hotel MyStays Shinsaibashi

82,484

82,484-20,941

D39

Comfort Hotel Kurosaki

37,89437,894-

16,900

900

1,711

54

13,575659

20,99334,569

D40

Comfort Hotel Maebashi

43,811

43,811-

26,499

5,969

1,677

76

18,261514

17,31235,573

D41

Comfort Hotel Tsubame-Sanjo

34,94932,861

15,386

534

3,837

66

10,534413

19,56330,097

D42

Comfort Hotel Kitami

30,30030,300-14,614

900

1,640

53

11,508511

15,68527,194

D43

Hotel MyStays Gotanda Station

408,173

407,194

47,012

1,987

7,823

281

36,512

407

361,161

397,673

D44

Hotel Epinard Nasu

549,169

549,169-

347,516

9,396

14,881

838

321,968431

201,653

523,622

D45

Hotel MyStays Fukuoka Tenjin

192,325

192,325-

46,122

-

3,518

106

42,092405

146,202

188,294

D46

Hotel MyStays Hamamatsucho

114,650

114,650-

31,488

-

3,305

57

27,720404

83,161

110,882

D47

Hotel MyStays Premier Kanazawa

285,925

285,925-

118,952

-

6,617

250

111,677406

166,973

278,651

D48

Takamatsu Tokyu REI Hotel

104,257

76,2002,895

148

15,304422

52,70568,009D49

Hotel MyStays Premier
Hamamatsucho

50,80050,778

21

4,070

Total

9,260,917

8,927,781

333,135

3,518,684(Note 1)

2,088

978

28,05751,552Not disclosed because the consent of the tenant was not obtained.

60-

32,782646,226

390,797

13

3,981

75

46,73050,711

10,1952,281,374

190,090

5,742,232

8,023,607

(3)Tenant SummaryaSummary of lease conditions by property(As of June 30, 2017)
Leased area2(m )(Note 2)

Leasableunits(units)(Note 3)

LeasedTotalunits
number of(units)tenants(Note 4) (Note 5)

Rental revenue(JPY thousand)(Note7)

Ratio ofrentalrevenue(%)

Best Property Corporation

39,187

0.4

Pass throughmaster lease1

Best Property Corporation

46,598

0.5

Pass throughmaster lease48

1

Pacific Development &Management Co., Ltd

27,3390.3

Pass throughmaster lease

66

61

1

Mitsui Home Estate Co., Ltd.

33,024

0.4

Pass throughmaster lease

2,129.27

96

95

1

Tokyo Gakusei-life Co., Ltd.

49,146

0.5

Pass throughmaster lease

1,748.24

1,704.00

65

63

1

Pacific Development &Management Co., Ltd.

41,938

0.5

Pass throughmaster lease

Suncrest Shakujii-Koen

3,029.16

2,869.22

29

27

1

Mitsui Home Estate Co., Ltd.

39,074

0.4

Pass throughmaster lease

A33

Growth Maison Shin-Yokohama

1,858.44

1,803.86

68

66

1

Pacific Development &Management Co., Ltd

35,752

0.4

Pass throughmaster lease

A34

Belle Face Ueno-Okachimachi

1,351.11

1,224.37

64

58

1

Tokyo Gakusei-life Co., Ltd.
(Note 9)33,733

0.4

Pass throughmaster lease

A35

Grand Rire Kameido

1,562.26

1,562.26

72

72

1

J.S.B. Co., Ltd.

26,6190.3

Guaranteed
rent

A36

Growth Maison Ikebukuro

952.89906.97

42

40

1

Pacific Development &Management Co., Ltd

26,872

0.3

Pass throughmaster lease

A37

Growth Maison Yoga

1,015.34

937.8939

36

1

Mitsui Home Estate Co., Ltd.

22,080

0.2

Pass throughmaster lease

A38

Route Tachikawa

1,368.57

1,229.25

24

21

1

Pacific Development &Management Co., Ltd

21,6180.2

Pass throughmaster lease

A39

Shibuya-Honmachi Mansion

1,167.50

1,167.50

25

25

1

Pacific Development &Management Co., Ltd

20,042

0.2

Pass throughmaster lease

A40

City Heights Kinuta

1,235.93

1,102.73

19

17

1

Mitsui Home Estate Co., Ltd.

17,146

0.2

Pass throughmaster lease

A41

Acseeds Tower
Kawaguchi-Namiki

1,210.74

1,189.60

57

56

1

Goodworks Co., Ltd.
(Note 10)

25,110

0.3

Pass throughmaster lease

A42

Capital Heights Kagurazaka

1,126.65

939.7526

23

1

Mitsui Home Estate Co., Ltd.

19,885

0.2

Pass throughmaster lease

A43

College Square Machida

1,047.75

1,047.75

62

62

1

Mainichicomnet Co., Ltd.

17,484

0.2

Guaranteed
rent

A44

Belair Meguro

557.05512.23

25

23

1

Pacific Development &Management Co., Ltd

16,065

0.2

Pass throughmaster lease

A45

Wacore Tsunashima I

907.46835.6650

46

1

Pacific Development &Management Co., Ltd

17,917

0.2

Pass throughmaster lease

A46

Foros Nakamurabashi

815.77795.6137

36

1Mitsui Home Estate Co., Ltd.

18,425

0.2

Pass throughmaster lease

A47

Growth Maison Kaijin

2,040.27

2,040.27

34

34

1

Mitsui Home Estate Co., Ltd.

22,6990.2

Pass throughmaster lease

A48

College Square Machiya

871.35871.354343

1

Mainichicomnet Co., Ltd.

14,706

0.2

Guaranteed
rent

A51

City House Tokyo Shinbashi

3,364.00

3,121.34

86

80

1

Mitsui Home Estate Co., Ltd.

90,996

1.0

Pass throughmaster lease

A52

Winbell Kagurazaka

4,032.70

3,969.76

118

116

1

Mitsui Home Estate Co., Ltd.

105,442

1.1

Pass throughmaster lease

A53

Nishiwaseda Cresent Mansion

4,310.77

4,310.77

69

69

1

Pacific Development &Management Co., Ltd

74,338

0.8

Pass throughmaster lease

A54

Lexington Square Akebonobashi

1,987.88

1,919.42

88

85

1

Mitsui Home Estate Co., Ltd.

52,492

0.6

Pass throughmaster lease

A56

Casa Eremitaggio

1,197.19

1,124.81

17

16

1

Pacific Development &Management Co., Ltd

32,586

0.4

Pass throughmaster lease

A59

Towa City Coop Shinotsuka II

1,627.13

1,486.84

58

53

1

Mitsui Home Estate Co., Ltd.

33,865

0.4

Pass throughmaster lease

A61

Bichsel Musashiseki

1,220.24

1,167.46

70

67

1

Mitsui Home Estate Co., Ltd.

23,233

0.3

Pass throughmaster lease

A62

Lexel Mansion Ueno Matsugaya

1,969.45

1,826.63

29

27

1

Pacific Development &Management Co., Ltd

35,106

0.4

Pass throughmaster lease

A63

Towa City Coop Sengencho

3,426.36

2,870.46

154

129

1

Pacific Development &Management Co., Ltd

55,627

0.6

Pass throughmaster lease

A64

Royal Park Omachi

1,929.59

1,897.47

51

50

1

Goodworks Co., Ltd.

26,332

0.3

Pass throughmaster lease

A65

Lexington Square Haginomachi

1,528.58

1,368.38

39

35

1

Goodworks Co., Ltd.

17,161

0.2

Pass throughmaster lease

A66

Visconti Kakuozan

705.75625.588

71

Mitsui Home Estate Co., Ltd.

10,730

0.1

Pass throughmaster lease

A71

Lexington Square Daitabashi

1,430.64

1,318.66

43

40

1

Goodworks Co., Ltd.

31,574

0.3

Pass throughmaster lease

A72

Lexington Square Honjo
Azumabashi

784.74737.9433

31

1

Mitsui Home Estate Co., Ltd.

17,807

0.2

Pass throughmaster lease

Property
No.

Property nameLeasable area2(m )(Note 1)

A26

Nisshin Palacestage Daitabashi

1,771.13

1,591.08

98

88

1

A27

Nisshin Palacestage HigashiNagasaki

2,681.94

2,510.11

60

56

A28

Growth Maison Gotanda

1,051.50

1,051.50

48

A29

Growth Maison Kameido

1,367.96

1,264.60

A30

Emerald House

2,152.31

A31

Harmonie Ochanomizu

A32

61

Tenants (Note 6)

Type oflease(Note 8)

Property
No.

Property nameLeasable area2(m )(Note 1)

Leased area2(m )(Note 2)

Leasableunits(units)(Note 3)

LeasedTotalunits
number of(units)tenants(Note 4) (Note 5)

Tenants (Note 6)

Rental revenue(JPY thousand)(Note7)

Ratio ofrentalrevenue(%)

Type oflease(Note 8)A73

AMS TOWER Minami 6-Jo

4,460.56

3,554.21

120

96

1

Big Service Co., Ltd.

44,905

0.5

Pass throughmaster lease

A75

Spacia Ebisu

7,794.91

7,420.04

109

104

1

Pacific Development &Management Co., Ltd

214,592

2.3

Pass throughmaster lease

A76

Neo Prominence

3,574.70

3,259.29

52

47

1

Goodworks Co., Ltd.

62,852

0.7

Pass throughmaster lease

A77

Invoice Shin-Kobe Residence

2,773.71

2,543.46

81

74

1

Goodworks Co., Ltd.

45,538

0.5

Pass throughmaster lease

A78

Cosmo Court Motomachi

2,310.49

2,202.49

82

78

1

Goodworks Co., Ltd.

35,227

0.4

Pass throughmaster lease

A79

Revest Honjin

1,933.80

1,789.26

80

74

1

Mininet, Inc.

32,201

0.3

Pass throughmaster lease

A80

Revest Matsubara

1,955.40

1,820.44

70

65

1

Mininet, Inc.

29,230

0.3

Pass throughmaster lease

A81

Sun Terrace Minami Ikebukuro

898.70780.4538

33

1

Goodworks Co., Ltd.

22,564

0.2

Pass throughmaster lease

A82

Alba Noritake Shinmachi

1,731.68

1,515.22

64

56

1

Mininet, Inc.

25,262

0.3

Pass throughmaster lease

A83

Revest Meieki Minami

1,634.60

1,560.02

61

58

1

Mininet, Inc.

26,2890.3

Pass throughmaster lease

A84

Revest Heian

1,554.03

1,554.03

40

40

1

Mininet, Inc.

23,712

0.3

Pass throughmaster lease

A85

Vendir Hamaotsu Ekimae

2,670.66

2,630.50

81

80

1

Mininet, Inc.

33,178

0.4

Pass throughmaster lease

A86

Salvo Sala

1,428.12

1,369.08

54

52

1

Goodworks Co., Ltd.

25,113

0.3

Pass throughmaster lease

A87

Excellente Kagurazaka

701.92660.7733

31

1

Goodworks Co., Ltd.

18,775

0.2

Pass throughmaster lease

A88

Luna Court Edobori

1,185.50

1,114.79

50

47

1

Goodworks Co., Ltd.

20,5480.2

Pass throughmaster lease

A89

Winntage Kobe Motomachi

1,433.35

1,231.36

57

49

1

Goodworks Co., Ltd.

20,080

0.2

Pass throughmaster lease

A90

Queen's Court Fukuzumi

765.18734.0625

24

1

Goodworks Co., Ltd.

17,350

0.2

Pass throughmaster lease

A91

Corp Higashinotoin

1,029.05

1,004.50

42

41

1

Goodworks Co., Ltd.

18,292

0.2

Pass throughmaster lease

A92

Belair Oimachi

530.60510.1026

25

1Goodworks Co., Ltd.

15,291

0.2

Pass throughmaster lease

A93

Siete Minami-Tsukaguchi

1,020.86

969.4440

38

1

Goodworks Co., Ltd.

17,206

0.2

Pass throughmaster lease

A94

Prime Life Sannomiya Isogami
Koen

789.12764.4632

31

1

Goodworks Co., Ltd.

14,025

0.2

Pass throughmaster lease

A95

HERMITAGE NANBA WEST

992.76992.7621

21

1

Goodworks Co., Ltd.

15,5490.2

Pass throughmaster lease

A96

Century Park Shinkawa
1-bankan

1,477.62

1,310.99

44

39

1

Goodworks Co., Ltd.

17,6880.2

Pass throughmaster lease

A97

West Avenue

794.80675.5640

34

1

Goodworks Co., Ltd.

12,175

0.1

Pass throughmaster lease

A98

Little River Honmachibashi

974.81855.0131

27

1Goodworks Co., Ltd.

13,4590.1

Pass throughmaster lease

A99

Prime Life Mikage

761.18735.6828

27

1

Goodworks Co., Ltd.

12,6630.1

Pass throughmaster lease

A100

City Court Kitaichijo

5,230.18

4,906.52

127

120

1

Big Service Co., Ltd.

65,411

0.7

Pass throughmaster lease

A101

Lieto Court Mukojima

2,940.20

2,852.75

82

79

1

Mitsui Home Estate Co., Ltd.

54,123

0.6

Pass throughmaster lease

A102

Lieto Court Nishi-Ojima

2,048.28

2,027.64

91

90

1

Mitsui Home Estate Co., Ltd.

48,437

0.5

A103Royal Parks Momozaka

8,776.26

8,776.26

147

147

4

Daiwa Living Co., Ltd.
(Note 11)140,320

1.5

A104Royal Parks Shinden

15,797.29

15,797.29

248

248

4

Daiwa Living Co., Ltd.
(Note 13)214,749

2.3

A105Royal Parks Tower Minami-Senju

39,113.46

36,257.39

557

516

1

Daiwa Living Co., Ltd.
(Note 14)426,286

4.6

A106Royal Parks Seasir Minami-Senju

6,496.86

6,496.86

113

113

1

Daiwa Living Co., Ltd.
(Note 14)55,9580.6

B08

Kindai Kagakusha Building

1,451.54

1,451.54

13

13

1 Haseko Livenet, Inc.

36,913

0.4

B09

Shinjuku Island

526.43526.43

1

1

1

B14

Lexington Plaza Nishigotanda

6,033.58

6,033.58

11

11

8 Community One Co., Ltd.

144,100

1.6

43,431

Pass through0.5
master lease

34,8440.4

B15

Cross Square NAKANO

2,145.00

1,872.14

45

37

Shin-ei Real Estate1
Business Co., Ltd.

B16

Ohki Aoba Building

2,178.37

1,931.59

13

13

1 One-Eyed Capital Advisers

62

Pass throughmaster lease
Guaranteed
rent and passthroughmaster lease(Note 12)
Guaranteed
rent and passthroughmaster lease
Pass throughmaster lease
Guaranteed
rent(Note 15)
Pass throughmaster leaseNot disclosed (Note 16)-

Pass throughmaster leaseProperty
No.

Property nameLeasable area2(m )(Note 1)

Leased area2(m )(Note 2)

Leasableunits(units)(Note 3)

LeasedTotalunits
number of(units)tenants(Note 4) (Note 5)

Tenants (Note 6)

Rental revenue(JPY thousand)(Note7)

Ratio ofrentalrevenue(%)

Type oflease(Note 8)

B17

Lexington Plaza Hachiman

8,419.15

8,419.15

18

18

1 Tokyo Biso Kogyo Corporation

161,712

1.7

Pass throughmaster lease

B18

AEON TOWN Sukagawa

18,440.58

18,440.58

1

1

1 AEONTOWN Co., Ltd.

141,715

1.5

Guaranteed
rent

C01

Times Kanda-Sudacho 4th

81.04

81.04

1

1

1 Times24. Co., Ltd.

2,700

0.0

D01

Hotel MyStays Kanda

2,585.72

2,585.72

126

126

1

MyStays Hotel Management
Co., Ltd.

105,509

1.1

D02

Hotel MyStays Asakusa

3,327.38

3,327.38

161

161

1

MyStays Hotel Management
Co., Ltd.

116,739

1.3

D03

Hotel MyStays Kyoto-Shijo

7,241.51

7,241.51

225

225

1

MyStays Hotel Management
Co., Ltd.

321,887

3.5

D04

MyStays Shin-Urayasu
Conference Center

6,232.30

6,232.30

175

175

1

MyStays Hotel Management
Co., Ltd.

175,921

1.9

D05

Hotel MyStays Maihama

2,456.36

2,456.36

90

90

1

MyStays Hotel Management
Co., Ltd.

134,694

1.5

D06

Hotel Vista Premio Dojima

9,445.32

9,445.32

153

153

1

MGH Master Lease Co., Ltd.
(Note 17)

202,987

2.2

D07

Hotel MyStays Nagoya-Sakae

9,064.71

9,064.71

279

279

1

Yugen Kaisha Nagoya HotelManagement

188,852

2.0

D08

Hotel MyStays
Sakaisuji-Honmachi

4,188.83

4,188.83

191

191

1

MyStays Hotel Management
Co., Ltd.

161,661

1.7

D09

Hotel MyStays Yokohama

7,379.43

7,379.43

190

190

1

MyStays Hotel Management
Co., Ltd.

108,321

1.2

D10

Hotel MyStays Nippori

1,719.29

1,719.29

93

93

1

MyStays Hotel Management
Co., Ltd.

59,9540.6

D11

Hotel MyStays
Fukuoka-Tenjin-Minami

3,412.71

3,412.71

177

177

1

MyStays Hotel Management
Co., Ltd.

133,097

1.4

D12

Flexstay Inn Iidabashi

2,953.38

2,953.38

62

62

1

MyStays Hotel Management
Co., Ltd.

50,7020.5

D13Hotel MyStays Ueno Inaricho

1,150.76

1,150.76

72

72

1

MyStays Hotel Management
Co., Ltd.

55,0960.6

D14

Flexstay Inn Shinagawa

1,134.52

1,134.52

55

55

1

MyStays Hotel Management
Co., Ltd.

47,7950.5

D15

Flexstay Inn Tokiwadai

2,539.75

2,539.75

130

130

1

MyStays Hotel Management
Co., Ltd.

59,2970.6

D16

Flexstay Inn Sugamo

2,089.86

2,089.86

105

105

1

MyStays Hotel Management
Co., Ltd.

56,6540.6

D17Hotel MyStays Otemae

4,956.66

4,956.66

111

111

1

MyStays Hotel Management
Co., Ltd.

124,567

1.3

D18

Flexstay Inn Kiyosumi Shirakawa

2,673.64

2,673.64

56

56

1

MyStays Hotel Management
Co., Ltd.

40,6340.4

D19

Flexstay Inn Nakanobu P1

770.56770.5639

39

1

MyStays Hotel Management
Co., Ltd.

20,7950.2

D20

Flexstay Inn Nakanobu P2

391.49391.4922

22

1

MyStays Hotel Management
Co., Ltd.

11,1680.1

D21

APA Hotel Yokohama Kannai

6,568.51

6,568.51

452

452

1 APA Hotel Kabushiki Kaisha

230,016

2.5

D22

Hotel Nets Hakodate

7,961.26

7,961.26

205

205

1

Hakodate Hospitality Godo
Kaisha112,960

1.2

63

Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation

Property nameLeasable area2(m )(Note 1)

Leased area2(m )(Note 2)

Leasableunits(units)(Note 3)

D23

Flexstay Inn Shirogane

1,754.06

1,754.06

84

84

1

D24

Hotel MyStays Haneda

5,400.16

5,400.16

174

174

D25

Hotel MyStays Kameido P1

4,349.67

4,349.67

266

D26

Hotel MyStays Ueno Iriyaguchi

2,247.92

2,247.92

D27

Hotel MyStays Kameido P2

2,793.99

D28

Hotel Vista Shimizu

D29

Super Hotel
Shinbashi/ Karasumoriguchi

Property
No.

LeasedTotalunits
number of(units)tenants(Note 4) (Note 5)

Rental revenue(JPY thousand)(Note7)

Ratio ofrentalrevenue(%)

MyStays Hotel Management
Co., Ltd.

59,7400.6

1MyStays Hotel Management
Co., Ltd.

182,340

2.0

266

1

MyStays Hotel Management
Co., Ltd.

174,873

1.9

97

97

1

MyStays Hotel Management
Co., Ltd.

95,3151.0

2,793.99

177

177

1

MyStays Hotel Management
Co., Ltd.

118,1421.3

3,559.81

3,559.81

152

152

1

Vista Hotel Management Co.,Ltd.

76,0660.8

1,403.89

1,403.89

74

74

1

Super Hotel Co., Ltd.

39,426

0.4

Tenants (Note 6)

D30

Flexstay Inn Higashi-Jujo

1,714.53

1,714.53

89

89

1

MyStays Hotel Management
Co., Ltd.

40,458

D31

Hotel MyStays Utsunomiya

11,733.23

11,733.23

126

126

1

MyStays Hotel Management
Co., Ltd.

89,478

D32

Flexstay Inn Kawasaki-Kaizuka

1,190.57

1,190.57

64

64

1

MyStays Hotel Management
Co., Ltd.

32,054

D33

Comfort Hotel Toyama

3,305.64

3,305.64

150

150

1

Greens Co., Ltd.

35,928Type oflease(Note 8)Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent

Fixed rent
plus variable
0.4
rent type
operation
Fixed rent
plus variable
1.0
rent type
operation
Fixed rent
plus variable
0.3
rent type
operation
0.4

Fixed rent

Fixed rent
plus variable
0.3
rent type
operation
Fixed rent
plus variable
1.2
rent type
operation

D34

Flexstay Inn
Kawasaki-Ogawacho

725.60725.606262

1MyStays Hotel Management
Co., Ltd.

25,877

D35

Flexstay Inn Ekoda

3,932.93

3,932.93

210

210

1

MyStays Hotel Management
Co., Ltd.

115,682

D36

Super Hotel Tokyo-JR Tachikawa
Kitaguchi

1,832.97

1,832.97

96

96

1

Super Hotel Co., Ltd.

31,787

0.3

Fixed rent

D37Super Hotel JR Ueno-iriyaguchi

1,279.16

1,279.16

69

69

1

Super Hotel Co., Ltd.

27,275

0.3

Fixed rent

82,484

Fixed rent
plus variable
0.9
rent type
operation

D38

Hotel MyStays Shinsaibashi

1,942.01

1,942.01

57

57

1

MyStaysCo., Ltd.

Hotel

Management

D39

Comfort Hotel Kurosaki

3,207.60

3,207.60

151

151

1

Greens Co., Ltd.

37,894

0.4

Fixed rent

D40

Comfort Hotel Maebashi

3,660.96

3,660.96

154

154

2

Greens Co., Ltd.

43,811

0.5

Fixed rent

D41

Comfort Hotel Tsubame-Sanjo

3,099.90

3,099.90

133

133

2

Greens Co., Ltd.

34,9490.4

Fixed rent

D42

Comfort Hotel Kitami

3,009.50

3,009.50

127

127

1

Greens Co., Ltd.

30,300

0.3

Fixed rent
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation

D43

Hotel MyStays Gotanda Station

8,752.42

8,752.42

335

335

1

MyStays Hotel Management
Co., Ltd.

408,173

4.4

D44

Hotel Epinard Nasu

37,702.33

37,702.33

310

310

1

Naqua Hotels and Resorts
Management Co., Ltd.

549,169

5.9

D45

Hotel MyStays Fukuoka Tenjin

5,083.06

5,083.06

217

217

1

MyStays Hotel Management
Co., Ltd.

192,325

2.1

D46

Hotel MyStays Hamamatsucho

1,951.90

1,951.90

105

105

1

MyStays Hotel Management
Co., Ltd.

114,650

1.2

D47

Hotel MyStays Premier Kanazawa

13,250.03

13,250.03

261

261

1

MyStays Hotel Management
Co., Ltd.

285,925

3.1

D48

Takamatsu Tokyu REI Hotel

7,148.17

7,148.17

193

193

3

Tokyu Hotels Co., Ltd.

104,257

1.1

Fixed rent

D49

Hotel MyStays Premier
Hamamatsucho

6,151.93

6,151.93

134

134

1

MyStays Hotel Management
Co., Ltd.

50,800

0.5

Fixed rent
plus variable
rent type
operation

Total

461,690.56

450,888.97

12,117

11,836144-

9,260,917

100.0

-

64

(Note 1)“Leasable Area” is the total leasable floor area for guest room, residential, office, retail and others, for each real estate or real estate intrust.

(Note 2)

“Leased Area” is the total sum of the leased area with respect to which a lease agreement with an end-tenant has actually beenentered into and which are leased to the end-tenant (the area specified in the lease agreement). With respect to the rent-guarantee
type master lease agreement, the area leased to master lessee is listed.

(Note 3)

“Leasable Units” with respect to hotel properties means the total number of guest rooms and rentable retail units, etc. for each realestate or real estate in trust, and with respect to properties other than hotel properties, means the total number of rentable units andretail units, etc. in each real estate or real estate in trust.

(Note 4)

“Leased Units” with respect to hotel properties means the total number of guest rooms, retail spaces, etc. actually leased to tenants or
end-tenants based on lease agreements, and with respect to properties other than hotel properties, means the total number of units,
retail units, etc. actually leased to tenants or end-tenants based on lease agreements.

(Note 5)

“Total Number of Tenants” is calculated by counting a lessee who has directly concluded a lease agreement for each property as one
tenant, and a tenant who has rented two or more rooms in a single property is calculated as one tenant.

(Note 6)

“Tenant” is the master lessee where there is a master lease agreement between INV or the trustee and a master lease company, and theprincipal lessee where there are direct lease agreements with end-tenants.

(Note 7)

“Rental Revenue” is the aggregate rent revenue for each property for the fiscal period, rounded down to the nearest thousand yen.

(Note 8)With respect to the properties for which a master lease agreement has been entered into, the type of lease (either a pass-throughmaster lease or a fixed rent) is indicated. “Pass-through master lease” is defined as a lease under which, pursuant to the pass-throughmaster lease agreement entered into between the master lease company and INV or the trustee, the amount equal to the rent under thesublease agreement between the master lease company and the end tenant shall be paid to INV or the trustee.
“Guaranteed rent” is defined as a lease under which a specified rent shall be paid to INV or the trustee, regardless of the rent under
the sublease agreement between the master lease company and the end tenant. Moreover, with respect to hotel properties, the type ofrent received from the relevant operator (either a fixed-rent or a fixed rent plus variable rent type operation) is indicated. “Fixedrent” is defined as an agreement under which INV or the trustee shall receive a specified rent, regardless of the operational results of
the relevant hotel. “Fixed rent plus variable rent type operation” is defined as an agreement under which INV or the trustee shallreceive rent that varies based on the GOP (Gross Operating Profit), in addition to a fixed rent.

(Note 9)The master lessee and property manager was changed from Mainichicomnet Co., Ltd. on May 1, 2017.

(Note 10) The master lessee and property manager was changed from Access Group, Inc. on January 1, 2017.
(Note 11) The master lessee and property manager was changed to Goodworks Co., Ltd. on August 1, 2017.
(Note 12) With the change described in Note 11, the type of lease for the residential portion was changed from “guaranteed rent” to“pass-through master lease.”(Note 13) The master lessee and property manager was changed to Goodworks Co., Ltd. on July 1, 2017.
(Note 14) The master lessee and property manager is scheduled to be changed to Goodworks Co., Ltd. on December 1, 2017.
(Note 15) With the change described in Note 14, the type of lease for the residential portion is scheduled to be changed from “guaranteed rent”
to “pass-through master lease.”(Note 16) Not disclosed because the consent of the tenant was not obtained.
(Note 17) The operator to which the tenant entrusts management of hotel operations was changed to MyStays Hotel Management Co., Ltd. on
August 1, 2017.

65

bOccupancy trend(Unit: %)Property
No.

A26
A27

Property nameNisshin Palacestage
Daitabashi
Nisshin Palacestage
Higashi-Nagasaki

23rd
24th
25th
26th
27th
fiscal period fiscal period fiscal period fiscal period fiscal period
As of
As of
As of
As of
As of
the end of
the end of
the end of
the end of
the end of
Dec. 2014
June 2015
Dec. 2015
June 2016
Dec. 2016

As ofthe end of
Jan. 2017

As of
the end of
Feb. 201728th
fiscal period
As of
As of
the end of
the end of
Mar. 2017
Apr. 2017

As of
the end of
May 2017

As ofthe end ofJune 2017

90.0

96.9

96.1

97.0

98.0

98.0

98.0

95.1

93.9

91.8

89.8

96.3

94.9

96.8

93.2

96.5

96.5

100.0

98.8

100.0

98.8

93.6

A28

Growth Maison Gotanda

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

A29

Growth Maison
Kameido

86.2

95.4

97.0

95.5

92.4

90.9

95.5

89.3

93.9

92.4

92.4

A30

Emerald House

98.0

100.0

97.9

100.0

96.9

94.9

91.8

98.8

97.6

97.6

98.9

A31

Harmonie Ochanomizu

93.5

88.3

90.8

100.0

100.0

94.7

100.0

98.7

97.4

97.4

97.5

A32
A33
A34

Suncrest Shakujii-Koen
Growth Maison
Shin-Yokohama
Belle Face
Ueno-Okachimachi

97.0

97.4

97.0

84.3

94.0

94.1

94.1

100.0

98.0

98.0

94.7

95.6

97.0

97.2

89.7

94.2

94.3

97.2

97.0

97.0

95.6

97.1

98.3

100.0

100.0

98.3

95.2

92.0

90.5

95.4

93.7

90.6

90.6

A35

Grand Rire Kameido

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

A36

Growth Maison
Ikebukuro

90.5

88.1

97.6

97.6

100.0

97.6

100.0

100.0

97.6

97.6

95.2

A37

Growth Maison Yoga

94.9

94.9

94.8

97.5

94.8

94.8

92.3

100.0

97.5

97.5

92.4

A38

Route Tachikawa

96.6

96.6

96.6

93.2

100.0

100.0

100.0

96.6

96.6

93.2

89.8

A39

Shibuya-Honmachi
Mansion

91.3

89.9

96.4

95.9

91.9

88.6

93.1

93.1

100.0

100.0

100.0

City Heights Kinuta

100.0

94.6

89.2

100.0

94.6

94.6

94.6

100.0

100.0

94.6

89.2

86.0

100.0

86.0

94.8

89.4

87.7

87.7

96.5

96.5

94.8

98.3

91.6

94.4

97.2

97.2

97.2

92.4

91.0

95.2

92.4

92.4

83.4

A40
A41
A42

Acseeds Tower
Kawaguchi-Namiki
Capital Heights
Kagurazaka

A43

College Square Machida

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

A44

Belair Meguro

88.1

100.0

96.0

96.1

92.1

88.1

96.1

96.1

96.1

96.0

92.0

A45

Wacore Tsunashima I

89.9

98.0

91.9

98.0

89.9

87.8

85.8

91.9

91.9

92.1

92.1

A46

Foros Nakamurabashi

88.8

90.5

100.0

96.2

91.2

87.9

93.7

100.0

97.5

97.5

97.5

A47

Growth Maison Kaijin

89.0

87.3

96.7

97.7

97.4

94.9

97.4

100.0

100.0

100.0

100.0

A48

College Square Machiya

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

A51

City House Tokyo
Shinbashi

95.6

97.1

98.6

96.1

93.3

92.9

94.5

95.6

96.0

92.0

92.8

A52

Winbell Kagurazaka

100.0

95.4

98.3

98.6

95.5

94.6

95.2

98.3

97.4

97.5

98.4

90.5

92.1

97.5

100.0

95.8

96.2

98.4

97.2

98.3

98.3

100.0

88.8

93.5

98.8

95.4

96.7

96.7

95.5

96.6

96.6

98.9

96.6

A53
A54

Nishiwaseda Cresent
MansionLexington Square
Akebonobashi

A56

Casa Eremitaggio

91.2

84.2

100.0

100.0

96.7

96.7

96.7

100.0

100.0

100.0

94.0

A59

Towa City Coop
Shinotsuka II

91.3

96.3

96.4

97.6

96.3

92.1

90.9

91.1

93.8

92.6

91.4

Bichsel Musashiseki

85.8

98.5

97.1

95.7

91.5

91.5

91.6

85.7

94.3

94.3

95.7

96.8

100.0

100.0

100.0

96.4

96.3

93.7

100.0

96.4

96.4

92.7

80.2

83.0

93.1

91.1

89.7

88.4

87.1

86.5

86.3

83.8

83.8

A61
A62
A63

Lexel Mansion Ueno
Matsugaya
Towa City Coop
Sengencho

A64

Royal Park Omachi

88.1

98.3

98.3

96.7

92.8

91.4

96.7

96.7

96.7

98.3

98.3

A65

Lexington Square
Haginomachi

100.0

92.4

92.6

100.0

92.1

92.1

92.1

89.8

89.5

86.9

89.5

Visconti Kakuozan

89.7

78.3

86.3

100.0

83.8

100.0

100.0

88.6

88.6

88.6

88.6

85.1

93.0

90.1

97.2

92.9

92.2

94.3

91.5

92.2

94.3

92.2

97.0

91.1

97.0

94.1

96.9

96.9

96.9

84.6

81.6

81.8

94.0

83.7

83.3

94.3

87.6

86.1

86.8

88.2

87.5

85.4

81.1

79.7

Spacia Ebisu

93.6

93.6

95.6

91.7

94.0

94.0

94.1

98.4

98.4

95.5

95.2

Neo Prominence

93.9

94.9

96.6

96.2

95.0

95.0

94.8

94.7

92.9

92.9

91.2

94.0

88.4

94.9

98.2

81.5

82.4

88.0

90.3

88.9

87.5

91.7

86.6

96.2

96.2

96.3

86.5

86.6

85.5

86.7

89.3

91.4

95.3

A66
A71
A72
A73
A75
A76
A77
A78

Lexington Square
Daitabashi
Lexington Square Honjo
Azumabashi
AMS TOWER Minami
6-Jo

Invoice Shin-Kobe
Residence
Cosmo Court
Motomachi

66

Property
No.

A79

Property name

23rd
24th
25th
26th
27th
fiscal period fiscal period fiscal period fiscal period fiscal period
As of
As of
As of
As of
As of
the end of
the end of
the end of
the end of
the end of
Dec. 2014
June 2015
Dec. 2015
June 2016
Dec. 2016

As ofthe end of
Jan. 2017

As of
the end of
Feb. 201728th
fiscal period
As of
As of
the end of
the end of
Mar. 2017
Apr. 2017

As of
the end of
May 2017

As ofthe end ofJune 2017

Revest Honjin

92.5

100.0

98.8

97.5

95.0

98.8

98.8

100.0

97.5

93.8

92.5

Revest Matsubara

93.7

89.5

93.1

88.7

91.8

89.3

91.8

98.8

96.2

93.7

93.1

92.1

97.4

97.4

100.0

97.4

100.0

97.4

92.1

84.2

86.8

86.8

94.4

98.6

91.0

97.2

91.0

91.7

92.4

91.6

90.3

88.9

87.5

Revest Meieki Minami

95.4

100.0

100.0

96.6

93.6

95.1

95.4

93.6

93.6

92.1

95.4

A84

Revest Heian

100.0

92.0

100.0

100.0

88.7

90.3

92.0

96.8

96.8

98.4

100.0

A85

Vendir Hamaotsu
Ekimae

87.3

88.4

88.4

95.3

93.4

90.2

93.0

98.8

97.3

98.5

98.5

A86

Salvo Sala

93.5

94.4

98.0

100.0

96.7

96.7

98.3

96.4

95.9

93.7

95.9

A87

Excellente Kagurazaka

88.3

97.1

91.2

97.1

88.3

91.2

94.1

97.1

97.1

94.1

94.1

A88

Luna Court Edobori

88.1

94.0

96.0

96.0

98.0

96.0

96.0

94.0

94.0

90.0

94.0

A89

Winntage Kobe
Motomachi

94.8

94.7

85.9

86.0

80.7

80.7

80.7

91.0

91.1

85.9

85.9

A90

Queen's Court Fukuzumi

92.5

100.0

95.9

93.1

96.6

96.6

96.6

100.0

95.9

95.9

95.9

A91

Corp Higashinotoin

92.9

95.7

97.9

90.8

95.2

95.2

97.6

100.0

92.9

97.6

97.6

Belair Oimachi

92.9

96.1

96.4

100.0

92.9

96.4

83.2

90.3

90.3

96.1

96.1

97.5

92.6

95.0

97.5

97.5

95.0

95.0

100.0

100.0

95.0

95.0

96.9

93.8

100.0

93.8

87.5

90.6

96.9

93.8

90.6

90.6

96.9

100.0

95.7

91.2

100.0

88.0

88.1

92.0

96.0

96.0

95.7

100.0

95.5

91.0

91.0

95.4

90.9

93.2

93.2

95.4

93.3

91.0

88.7

A80
A81
A82
A83

A92
A93
A94
A95
A96

Sun Terrace Minami
IkebukuroAlba Noritake
Shinmachi

Siete
Minami-Tsukaguchi
Prime Life Sannomiya
Isogami Koen
HERMITAGE NANBA
WEST
Century Park Shinkawa
1-bankan

A97

West Avenue

85.0

75.0

80.0

85.0

87.5

87.5

92.5

90.0

87.5

85.0

85.0

A98

Little River
Honmachibashi

93.8

96.9

100.0

100.0

96.9

100.0

93.8

96.9

96.9

90.8

87.7

A99

Prime Life Mikage

93.3

86.8

100.0

96.7

86.8

86.8

83.5

90.1

93.4

90.0

96.6

A100

City Court Kitaichijo

－

－

96.6

95.7

94.8

95.5

100.0

100.0

94.0

91.2

93.8

A101

Lieto Court Mukojima

－

－

97.6

96.8

95.3

96.5

95.6

99.0

99.0

94.5

97.0

Lieto Court Nishi-Ojima

－

－

100.0

98.0

96.8

96.8

95.6

100.0

97.8

97.8

99.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

A102
A103
A104
A105
A106
B08

Royal Parks
Momozaka
Royal Parks
ShindenRoyal Parks
Tower Minami-Senju
Royal Parks
Seasir Minami-Senju
Kindai Kagakusha
Building

－

－

－

100.0

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

－

－

－

－

－

－

95.0

93.6

93.8

92.7

－

－

－

－

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

90.6

90.6

90.6

90.6

90.6

100.0

B09

Shinjuku Island

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

B14

Lexington Plaza
Nishigotanda

100.0

100.0

100.0

100.0

91.8

91.8

100.0

100.0

100.0

100.0

100.0

B15

Cross Square NAKANO

64.3

70.8

79.1

84.1

89.1

85.7

85.7

87.4

87.4

87.4

87.3

B16

Ohki Aoba Building

B17
B18
C01
D01
D02
D03
D04
D05
D06
D07
D08

100.0

100.0

100.0

83.6

83.6

83.6

83.6

83.6

83.6

88.7

88.7

100.0

100.0

100.0

98.8

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

Hotel MyStays Kanda

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

Hotel MyStays Asakusa

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

Lexington Plaza
Hachiman
AEON TOWN
Sukagawa
Times Kanda-Sudacho
4thHotel MyStays
Kyoto-Shijo
MyStays Shin-Urayasu
Conference Center
Hotel MyStays Maihama
Hotel Vista Premio
DojimaHotel MyStays
Nagoya-Sakae
Hotel MyStays
Sakaisuji-Honmachi

67

Property
No.

Property name

23rd
24th
25th
26th
27th
fiscal period fiscal period fiscal period fiscal period fiscal period
As of
As of
As of
As of
As of
the end of
the end of
the end of
the end of
the end of
Dec. 2014
June 2015
Dec. 2015
June 2016
Dec. 2016

As ofthe end of
Jan. 2017

As of
the end of
Feb. 201728th
fiscal period
As of
As of
the end of
the end of
Mar. 2017
Apr. 2017

As of
the end of
May 2017

As ofthe end ofJune 2017

D09

Hotel MyStays
Yokohama

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D10

Hotel MyStays Nippori

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D11

Hotel MyStays
Fukuoka-Tenjin-Minami

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D12

Flexstay Inn Iidabashi

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D13

Hotel MyStays Ueno
Inaricho

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D14

Flexstay Inn Shinagawa

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D15

Flexstay Inn Tokiwadai

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D16

Flexstay Inn Sugamo

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

Hotel MyStays Otemae

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

Hotel Nets Hakodate

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D23

Flexstay Inn Shirogane

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D24

Hotel MyStays Haneda

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D17
D18
D19
D20
D21
D22

D25
D26
D27
D28
D29
D30
D31
D32

Flexstay Inn Kiyosumi
ShirakawaFlexstay Inn Nakanobu
P1
Flexstay Inn Nakanobu
P2
APA Hotel
Yokohama-Kannai

Hotel MyStays Kameido
P1
Hotel MyStays Ueno
Iriyaguchi
Hotel MyStays Kameido
P2
Hotel Vista Shimizu
Super Hotel Shinbashi/
Karasumoriguchi
Flexstay Inn
Higashi-Jujo
Hotel MyStays
Utsunomiya
Flexstay Inn
Kawasaki-Kaizuka

D33

Comfort Hotel Toyama

－

－

100.0

D34

Flexstay Inn
Kawasaki-Ogawacho

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D35

Flexstay Inn Ekoda

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

Comfort Hotel Kurosaki

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D40

Comfort Hotel Maebashi

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D41

Comfort Hotel
Tsubame-Sanjo

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D42

Comfort Hotel Kitami

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D43

Hotel MyStays
Gotanda Station

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

Hotel Epinard Nasu

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

－

－

－

－

－

－

－

－

100.0

100.0

96.1

96.9

98.2

98.5

97.9

97.7

98.1

98.3

98.0

97.7

97.7

D36
D37
D38
D39

D44
D45
D46
D47
D48
D49

Super Hotel Tokyo-JR
Tachikawa Kitaguchi
Super Hotel JR
Ueno-iriyaguchi
Hotel MyStays
Shinsaibashi

Hotel MyStays
Fukuoka Tenjin
Hotel MyStays
Hamamatsucho
Hotel MyStays PremierKanazawa
Takamatsu Tokyu REI
Hotel
Hotel MyStays Premier
Hamamatsucho
Total(Note)“Occupancy Rate” is calculated by dividing the leased area by the leasable area, and rounded to the first decimal place.

68