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

July 28, 2020
IssuerIchigo Hotel REIT Investment Corporation (“Ichigo Hotel,” 3463)
1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo
Representative: Osamu Miyashita, Executive Director
www.ichigo-hotel.co.jp/english
Asset Management Company
Ichigo Investment Advisors Co., Ltd.
Representative: Hiroshi Iwai, President
Inquiries: Hidehito Iwasaka, Head of Ichigo Hotel
Tel: +81-3-3502-4892

Earnings Forecast Revision for the January 2021 Fiscal PeriodIchigo Hotel is revising down its January 2021 earnings forecast announced in theMarch 16, 2020 release “January 2020 Fiscal Period Earnings.”
1. January 2021 Earnings Forecast Revision(JPY million)

Operating
ProfitRecurring
Profit

1,525

797

594

593

2,328

1,107

472

259

259

1,015

-418

-325

-335

-334

-1,313% Change-27.4%-40.7%-56.3%-56.3%-56.4%

Reference:January 2020Actual

3,561

2,334

2,132

2,1308,356

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

OperatingRevenue

Reference: Net Income per Share: JPY 1,015
Period-end number of shares outstanding: 254,974 shares
Note: Actual operating revenue, operating profit, recurring profit, net income, and thedividend may vary due to changes in circumstances, so these forecasts should not beconstrued as a guarantee of such results. Ichigo Hotel will make a forecast revision shoulda material discrepancy emerge between this forecast and actual operating results.

1

2. January 2021 Earnings Forecast Revision Rationale
The ongoing impact of Covid-19 continues to be deeply uncertain. Although somehotels, including a number of our hotels, have resumed operations upon the lifting ofJapan’s nationwide state of emergency and the Japanese government has implemented a
Go To Travel campaign to stimulate demand, recovery of both Japanese and inbounddemand is expected to take some time.
Given these conditions, Ichigo Hotel is revising down its January 2021 fiscal period(August 1, 2020 – January 31, 2021) earnings forecast announced in the March 16, 2020
release “January 2020 Fiscal Period Earnings.”
The revised forecast and the below “Preconditions for the January 2021 Fiscal Period
Earnings Forecast” assume current Covid-19 impacts. Should an additional forecast
revision become necessary, Ichigo Hotel will promptly disclose the details.
Please note that Ichigo Hotel is not revising at this time the July 2020 forecast
announced in the release “Earnings Forecast Revision for the July 2020 Fiscal Period”
on April 27, 2020. However, Ichigo Hotel is currently discussing the rental outlook withhotel operators that temporarily closed the hotels in response to lowered demand due toCovid-19. Should an additional earnings forecast revision become necessary as aconsequence, for example due to impacts that emerge with respect to fixed andminimum guaranteed rents, Ichigo Hotel will promptly disclose the details.

2Preconditions for the January 2021 Fiscal Period Earnings Forecast
Preconditions
PeriodNumber ofHotels

 August 1, 2020 to January 31, 2021 (184 days)• The forecast assumes 23 hotels
Within operating revenue, rental income is forecast based on current leasecontracts taking into consideration such factors as the hotel and market
conditions, and Covid-19 impact on hotel demand.1
1The forecast rental income assumes operators and tenants will fully pay
their contractual rents without delay or default.

Details of January 2021 Rental Income Forecast(JPY million)
Fixed Rent/
Minimum Variable
Guaranteed Rent
Rent

Hotel Name
Smile Hotel Kyoto Shijo
Nest Hotel Sapporo Ekimae
Chisun Inn Osaka Hommachi
Comfort Hotel Hamamatsu
Nest Hotel Sapporo Odori
Valie Hotel Tenjin
Nest Hotel Osaka Shinsaibashi
Comfort Hotel Central International
Airport
Smile Hotel Tokyo Asagaya
Nest Hotel Matsuyama
Comfort Hotel Okayama
Comfort Hotel Kushiro

OperatingRevenue

Comfort Hotel Suzuka
Court Hotel Kurashiki
Nest Hotel Kumamoto
Valie Hotel Hiroshima
HOTEL EMIT SHIBUYAOther1Total
1Total

34
32
3955
26
32
65

––––
2––

34
32
39
55
29
32
65

151

–

151

59
35
37
18

––
1–

59
35
38
18

15

–

15

33
27
23
45
293
1,026

3
28
1
––
38

36
55
24
45
293
1,064

Figures for Hotel Wing International Nagoya and Hotel Wing
International Kobe Shin Nagata Ekimae, which are variable rent hotels,and figures for Hotel Livemax Nihombashi-Hakozaki, Grandpark-Inn
Yokohama, Urbain Hiroshima Executive, and Washington Hotel Plaza
Shimonoseki Eki Nishi, which are fixed rent hotels are included in3

“Other” because the hotel operators did not provide consent to disclose
hotel-specific data.
Retail: JPY 43 million of rental income from retail tenants at Chisun Inn
Osaka Hommachi, Hotel Wing International Kobe Shin Nagata Ekimae,
and Smile Hotel Tokyo Asagaya (including utility income)OperatingExpenses

 Depreciation: JPY 337 million. Depreciation has been calculated using
the straight-line method.
• Property and city planning taxes: JPY 108 million• Building maintenance and repair expenses are based on what Ichigo
Investment Advisors, the asset management company of Ichigo Hotel,
estimates will be necessary for each hotel during the period. However,actual expenses for the period could differ significantly from these
forecast amounts for reasons including the variability of maintenanceand repair expenses, one-time costs due to unexpected building damage,etc.
 Rental expenses, Ichigo Hotel’s principal operating expense (other thandepreciation, see above), are calculated based on historical data adjusted
for anticipated expense variations.
 Actual operating expenses may differ significantly from theseassumptions due to unforeseeable factors.

NonOperatingExpenses

 Interest expenses and other borrowing-related expenses: JPY 212
million Amortization of expenses related to the establishment of Ichigo Hotel:
JPY 100,000

Borrowings

 Total borrowings: JPY 25.47 billion as of January 31, 2021

Number ofShares 254,974 shares issued and outstanding as of today. The forecast assumes
there will be no additional new issuance of shares through January 31,2021.

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

Dividend in
Excess ofEarnings

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

Other This forecast assumes that there are no material revisions to laws andregulations, the tax system, accounting standards, listing rules of theTokyo Stock Exchange, and rules of the Investment Trusts Association,
Japan, and no material changes in the state of the economy and realestate market conditions.

4