This is an English language summary of the original Japanese Asset Management Report available on our
Website. However, no assurance or warranties are given with respect to the accuracy or completeness of
this English language summary. The Japanese original shall prevail in the case of any discrepancies
between this summary and the Japanese original.

Invincible Investment Corporation
Asset Management Report
Fiscal Period ended December 31, 2019 (July 1, 2019 to December 31, 2019)
Content
Greetings from Naoki Fukuda, Executive Director of Invincible Investment Corporation and President &CEO of Consonant Investment Management Co., Ltd.
Increase in Asset Size and Initiatives for Asset Recycling
Properties Acquired in January 2020
Unitholder Benefit Program
I.
II.
III.
IV.
V.
VI.
VII.

Asset Management Report
Balance Sheet
Statement of Income and Retained Earnings
Statement of Changes in Net Assets
Notes to Financial Statements
Statement of Cash Distribution
Statement of Cash Flows (Reference Information)

Domestic Portfolio Map (As of February 29, 2020)
Financial Conditions
Overview of Unitholders/Investment Units
Information for Unitholders

Greetings from Naoki Fukuda, Executive Director of Invincible Investment Corporation and President& CEO of Consonant Investment Management Co., Ltd.
We would like to take this opportunity to express our sincere gratitude to all unitholders of Invincible
Investment Corporation ("INV") for your continued support.
We hereby provide you with a report on INV's asset management and financial results for the 33rd fiscal
period (from July 1, 2019 to December 31, 2019) (the "Reporting period").
During the Reporting Period, INV raised JPY 24.4 billion through a global offering for the sixth
consecutive year. INV also acquired 18 domestic hotels for JPY 82.6 billion as a result of asset replacement
using loans and JPY39.9 billion in proceeds from the sale of two residential properties implemented in theprevious fiscal year. The actual NOI yield on an appraisal basis for the acquired properties was 5.6%,
while the actual NOI yield on a sales price basis was 3.9%.
In December 2019, we decided to sell two residential properties at JPY 9.6 billion (NOI yield on sale pricebasis: 3.4%) and acquire two hotels at JPY 16.2 billion (NOI yield on appraisal basis: 5.8%), with the aimof further improving profits by replacing assets, and recorded a gain of JPY1.9 billion on the sale of one
property in the Reporting Period.

As a result, retained earnings, which will be used to ensure the stabilityof DPU in the future, increased by JPY 1.1 billion from the end of the previous fiscal period to JPY 12.7
billion at the end of the Reporting Period, and amounted to JPY 2,090 per investment unit.
Although we have actively managed assets in this manner, the NOI of the domestic hotel portfolio
decreased due to several major typhoons and the deterioration of Japan-Korea relations.

Meanwhile, theoverseas hotel portfolio is performing well, and the NOI of the residential portfolio is also growing steadily.
As a result, operating revenues reached JPY 18,587 million, operating income JPY 12,858 million, and net
income JPY 11,638 million (Note 1). INV decided on a distribution per unit (DPU) of JPY 1,725 for
December 2019 fiscal period (+2.5% year on year (Note 2)) and annual DPU of JPY 3,381 for 2019.
The two domestic hotel properties acquired in January 2020 are all of a full-service type, and since they are
hotels in areas that were not previously owned, further diversification is proceeding in terms of both thetype of hotel portfolio and the region. In addition, both hotels are located in markets where new supply of
hotels is limited and tourism demand is growing. By acquiring these two properties, we expanded ourportfolio and realized risk diversification with the aim of further improving profitability and stability.
As of February 28, 2020, INV's assets totaled JPY 511.6 billion on an acquisition-price basis, of which 88%
was hotels. INV has grown into an investment corporation that owns the largest hotel portfolio in J-REIT.
In addition, JCR raised the credit rating of INV from A (positive) to A+ (stable) on February 4, 2020.

-1-

Since the beginning of this year, the outlook has remained uncertain due to the outbreak of the newcoronaviral virus, and it might have our investors be concerned about the impact on INV. However, as
described above, as much of the gain on sales has been accumulated as internal reserves, and INV intends
to strive for stable DPU by utilizing it as necessary in the future. Specifically, we are targeting an annual
DPU of not less than JPY 3,400.
Your continued support is highly appreciated.
Naoki Fukuda
Executive Director, Invincible Investment Corporation
President & CEO, Consonant Investment Management Co., Ltd.
(Note 1) Compared with June 2019, sales revenues were -32%, operating revenues were -42%, and net revenues were -45%, resulting in a
$11.1 thousand million sale of 2 residences during June 2019.
(Note 2) Comparison with the fiscal period ended December 2018. In order to eliminate the seasonal effects of hotel variable rent, which isone of the major revenues of INV, the comparison is made with the same period in the previous year and not with the previous fiscal
period (ended June 2019).
(Note 3) Please refer to the notes on pages 4-5 for further information on the figures in the main part.

Distribution per unit for the 33rd fiscal period(the fiscal period ended December 2019)

JPY 1,725(Note) The forward-looking statements, forecasts and goals described in this report are based on available information, assumptions andestimates as of February 29, 2020. These assumptions and estimates are unavoidably uncertain, and could be affected by various
risks and factors beyond INV’s control. Thus, no guarantee can be made regarding the realization of such future forecasts and targets,and actual results may vary significantly.

-2-

Change in DPU-3-

Increase in Asset Size and Initiatives for Asset Recycling.
INV acquired 18 domestic hotels through a public offering in July 2019, furthermore, from December 2019
to January 2020, we proceeded proactive asset management via asset recycling (sale of two residential
properties and acquisition of two hotels) with the aim of improving profits. As a result of such efforts, theasset size has continued to grow.

◼ Growth of AUM◼ Portfolio Composition(Note 1) Based on the acquisition price as of the end of the relevant year. After 2017, includes the amount of contribution by INV to the JV TMK preferred equity securities
that holds Sheraton Grande Tokyo Bay Hotel (SGTB). “Feb. 29,2020” indicates the acquisition price as of February 29, 2020. As to the two overseas assets(Westin Grand Cayman Seven Mile Beach Resort & Spa and Sunshine Suites Resort) (the “Two Overseas Hotel Assets”), the amount of TK investment to a Cayman
Islands special purpose company (the “Cayman SPC”) that held leasehold interests in the overseas hotels as underlying assets is treated as acquisition price for“Dec. 2018”; and the book value of the leasehold, etc. of the overseas hotels held by the Cayman SPC, which succeeded leasehold, etc. of the overseas hotels fromthe Cayman SPC, as of May 9, 2019 (Cayman local time (May 10, 2019, Japan time)), is treated as acquisition price for “Dec. 2019” onward The amounts areconverted into JPY using the forward exchange rate of USD 1 = JPY110.45 based on the foreign exchange forward implemented in connection with the original
TK investment in the Cayman SPC (contract thereof was entered into on July 26, 2018, and implemented on September 26, 2018).
(Note 2) The amount of contribution by INV to the JV TMK preferred equity securities and the amount of TK investment by INV to the SPC are classified with the relevant
underlying assets and as one property based on the property type of the assets.
(Note 3) Calculated based on acquisition price as of February 29, 2020.
(Note 4) Defined as follows: Greater Tokyo (ex, Tokyo 23 wards) is Tokyo (ex. Tokyo 23 Wards), Kanagawa, Chiba and Saitama. Kansai area is Osaka, Hyogo ,Kyoto,
Shiga, Wakayama and Nara. Chubu area is Aichi, Gifu, Mie, Shizuoka, Nagano, Yamanashi, Niigata, Toyama, Ishikawa and Fukui. Kyushu area is Fukuoka,
Kumamoto, Kagoshima, Nagasaki, Oita, Miyazaki, Saga and Okinawa-4-◼ Overview of Asset Recycling(Note 1) Indicates actual NOI for the 12 months prior to the acquisition from February 2009 to January 2010
(Note 2) Indicates actual NOI for 2019 full year, assuming “Winbell Kagurazaka”, which was sold on December 17, 2019, was owned by INV until the end of 2019. The
same shall apply hereinafter(Note 3) Calculated by dividing the total amount of actual NOI (before and after depreciation) for 2019 full year by the sales price for the two disposed properties(Note 4) “Appraisal NOI Yield” and “After Depreciation NOI Yield” are calculated by dividing the total NOI derived from the direct capitalization method stated in theappraisal reports on the valuation date as of October 1, 2019 (and deducting estimated depreciation for After Depreciation NOI Yield) by the total of acquisition
price

Art Hotel Morioka-5-Properties Acquired in January 2020

Hotel MyStays Premier Narita◼ Located a 10-minute drive from Narita International Airport, ideally positioned to service airport-related demand fromboth domestic and international travelers year round◼ Reopened in February 2018 following extensive renovations and rebranding◼ In addition to 711 guest rooms, the hotel offers facilities including 17 conference and meeting rooms (maximum capacityof 300 people), multiple restaurants and dining spaces, a gym, a Japanese-style public bath, an outdoor pool, a tennis
court, a Japanese-style garden, and more
◼ Offers exclusive services to airline crews, including crew-only guest rooms, a private lounge and gym, specialty laundry
facilities, and dedicated service staff; these offerings are expected to help capture growing demand from airline-related
guests◼ The hotel's first floor buffet restaurant is equipped with an outdoor barbecue, expected to attract local customers in
addition to hotel guests

Overview of the Property
Hotel Type

Full Service

Address

40 Yokomine Oyama, Narita-shi, Chiba,
and 14 other lots

Access10-minute by car from Narita
International Airport

Completion
Date

May 1985

Renovation
PeriodAugust 2017 – January 2018

No. of Rooms

711 rooms

GFA (Note 1)

36,519.70 m

Land Area

25,129.24 m

2

2(Note 1) Excludes three annex buildings used for storage (total 36.36 m2)-6-Art Hotel Morioka◼ Eight-minute walk from Morioka Station on the JR Tohoku Shinkansen and other railway lines, and conveniently locatedin the CBD of Morioka City, the capital of Iwate Prefecture, with convenient access to nearby shopping and business
districts◼ Proximity to Morioka Station on the Tohoku Shinkansen, as well as Hanamaki Airport, which services routes to Shanghai
and Taipei, creates easy access for inbound travelers◼ Rebranded to the Art Hotel brand in March 2019 following extensive renovations to the hotel guest rooms, lobbies,
restaurants, and partial banquet halls◼ Boasts multiple restaurants renowned locally for their high quality of food and service◼ Features nine banquet halls with a maximum capacity of 300 people, including a "sky banquet" offering great views ofMorioka City. The hotel is well positioned to attract business from local companies for hosting meetings and training
seminars, and is also one of the only hotels in the city with venues for wedding ceremonies◼ Offers suitable room mix for both business and leisure travelers as well as domestic and overseas guests; half of the guest
rooms are twin layouts, and all guest rooms have a capacity of at least two people

Overview of the Property
Hotel Type

Full Service

Address

3-3-18 Odori, Morioka-shi, Iwate

Access8‐minute walk from Morioka Station(JR Tohoku Shinkansen and other train
lines)

Completion
Date

March 1981

Renovation
PeriodDecember 2018 – April 2019

No. of Rooms

214 rooms

GFA (Note 1)

16,727.08 m

Land Area

2,703.59 m

2

2(Note 1) Excludes annex buildings used for parking (80.50 m2)-7-

Unitholder Benefit Program
INV has introduced the unitholder benefit program to improve the satisfaction of its unitholders and expand
the unitholder base. Eligible unitholders can stay at Sheraton Grande Tokyo Bay Hotel and all MyStays
hotels at special discount rates.
*Detailed information is sent to eligible unitholders along with this report.

Overview of the Unitholder Benefit Program(Note 1)
Applicable Hotels
Eligible Unitholders◼ Sheraton Grande Tokyo Bay Hotel◼ All MyStays hotels(Note 2)
Unitholders who hold 10 or more Invincible units and whose names arerecorded on Invincible’s Unitholders’ Registry as of the relevant record dates:

Record Date

The last day of every fiscal period (June 30 and December 31 of each year)

Program Details

Stay with unitholder special discount rates at the above applicable hotels

Hotel Reservation
Available Period(Note 3)

Reservation via designated website posting accommodation plans for theunitholder benefit program
From April 1 to September 30 (eligible unitholders as of December 31)
From October 1 to March 31 (eligible unitholders as of June 30)

Sheraton Grande Tokyo Bay Hotel

Hotel Epinard Nasu

Fusaki Beach Resort Hotel & Villas(Note 1)
(Note 2)
(Note 3)

Hotel MyStays Premier Akasaka

The details of the unitholder benefit program described above are as planned by Invincible as of March 23, 2020, and the program may be changed orabolished even after it is has been introduced.
Refers to all hotels under MyStays brand managed by MHM, and hotels shown on the MyStays Hotel Group’s official website (https://www.mystays.com/enus/) will be applicable.
Available Period represents a period during which you can lodge by using the unitholder benefit program. To enjoy the unitholder benefit program, youactually need to lodge during the availability period.

-8-

I.

Asset Management Report

Overview of Asset Management
1

Trends in Investment Corporation’s Operating Results
29th

30th

31st

32nd

33rd

fiscal period

fiscal period

fiscal period

fiscal period

fiscal period

Jul. 1, 2017 toJan. 1, 2018 toJul. 1, 2018 toJan. 1, 2019 toJul. 1, 2019 toDec. 31, 2017

Jun. 30, 2018

Dec. 31, 2018

Jun. 30, 2019

Dec. 31, 2019

(Note 1) (JPY thousand)

12,647,270

13,104,841

14,451,005

27,339,670

18,587,253(Rental revenue – real estate)(JPY thousand)

11,403,236

11,122,481

13,604,224

12,153,399

14,545,826

Operating expenses(JPY thousand)

4,423,618

4,671,320

4,936,248

5,154,599

5,728,269(Property-related expenses)(JPY thousand)

3,962,183

4,136,619

4,450,676

4,490,658

4,673,007

Operating income(JPY thousand)

8,223,652

8,433,520

9,514,756

22,185,070

12,858,984

Ordinary income(JPY thousand)

7,303,702

7,722,553

8,384,676

21,240,482

11,639,553

Net income(JPY thousand)

7,303,097

7,721,948

8,384,071

21,239,877

11,638,948

Total assets(a) (JPY thousand)

371,758,254

374,512,988

455,362,796

467,931,975

522,431,999

(%)

21.3

0.7

21.6

2.8

11.5

(JPY thousand)

186,983,000

189,415,000

229,873,000

228,774,000

259,174,000(b) (JPY thousand)

181,320,466
30.4

181,523,263
0.1

221,364,900
21.9

233,046,414
5.3

259,730,758(%)

Unitholders’ capital(JPY thousand)

168,798,455

168,798,455

211,092,540

211,092,540

235,701,512

Total distributions(c) (JPY thousand)

7,496,535

6,854,248

9,537,291

9,384,287

10,517,049(Note 2) (%)

100.3

88.8

110.3

44.2

90.4

(d) (Units)

4,793,181

4,793,181

5,666,840

5,666,840

6,096,840(b) / (d) (JPY) (Note 3)

37,82937,87139,063

41,12542,601

By Period

Reporting period

Operating revenue

Operating Results(change from last period)

AssetsInterest-bearing debt
Net assets(change from last period)

Dividend
StatusDividend payout ratio
Number of investment units

Information per Unit

issued and outstanding
Net assets per unit
Distributions per unit

11.5(c) / (d) (JPY)

1,564

1,430

1,683

1,656

(Distributions of earnings per unit)

(JPY)

1,528

1,430

1,632

1,656

1,725
1,725

(Distributions in excess of retained

(JPY)

36

―

51

―

―

2.2

2.1

2.0

4.6

2.4

4.3

4.2

4.0

9.3

4.7

4.6

4.3

4.2

9.3

4.7

9.0

8.6

8.3

18.9

9.4

(%)

48.8
3.4

48.5
(0.3)

48.6
0.1

49.8
1.2

49.7
(0.1)

(Note 4) (JPY thousand)

10,008,268

9,758,373

12,192,581

11,247,273

14,490,677

earnings per unit)
Return on assets(change over year)

Financial Measures

Return on equity(change over year)
Capital ratio(change from last period)(Note 4) (%)(Note 4) (%)(b) / (a) (Note 4) (%)

NOI(Net Operating Income)(Note 1) Consumption taxes etc. are not included in the items including operating revenues.
(Note 2) Dividend payout ratio is calculated in accordance with the following formula and rounded to one decimal place:
Dividend payout ratio = Distribution amount (Excluding distributions in excess of retained earnings) ÷ Net income × 100(Note 3) Net assets per unit are rounded to the nearest unit.

-9-(Note 4) Figures above are calculated as below, and ratios are rounded to one decimal place. Annualized figures are shownin parenthesis.
Return on assets = Ordinary income / (Total assets at start of reporting period + Total assets at end of reporting period)/ 2) x 100.
Return on equity = Net income for period ended December 31, 2019 / (Net assets at start of reporting period + Net
assets at end of reporting period) / 2) x 100.
Capital ratio = Net assets at end of reporting period / Total assets at end of reporting period x 100.
NOI = Rental revenue – Property-related expenses + Management contract revenue - Management contract expenses+ Depreciation for period ended December 31, 2019- 10 -

2

Overview of Asset Management for the Fiscal Period Ended December 2019(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, 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 otheraffiliates of FIG, collectively the “Fortress Group”) was the main allottee, and the sponsor changed to the Fortress Group.
FIG became a subsidiary of SoftBank Group Corp. (“SoftBank Group”), after SoftBank Group acquired FIG effective on
December 27, 2017 (Note 1). Calliope, an affiliate of FIG, who owned 100% of the issued shares of Consonant
Investment Management Co., Ltd., the asset manager to which INV entrusts the management of its assets (the “AssetManager”), transferred 80.0% of issued shares of the Asset Manager to Fortress CIM Holdings L.P., a subsidiary of
SoftBank Group, and 20.0% to SoftBank Group on March 29, 2018, pursuant to the basic agreement which was enteredinto as of September 7, 2017. Although FIG is no longer an indirect parent company of the Asset Manager, FIG
continues to support INV as the sponsor.
Ever since the commencement of sponsorship from the Fortress Group (Note 2), 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, the Asset Manager revised theInvestment Guidelines for INV, 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, and has expanded its
portfolio.
Moreover, the Asset Manager revised the Investment Guidelines as of July 17, 2018. Such revision was intended toestablish an investment policy and asset management structure regarding investments in overseas assets, and also tochange the investment policy regarding domestic hotels to focus on (i) Limited service hotels, which feature relatively
higher profit margins and potential for revenue growth backed by increasing demand for accommodations, and (ii) Fullservice and Resort hotels, which have a variety of revenue sources, including lodging, dining and sales of goods, that are
expected to achieve stable growth in overall hotel revenues. Based on such change in investment policy, in July 2018,
INV decided on the acquisition of TK (Japanese anonymous association (tokumei kumiai)) interest in two overseas hotels,“Westin Grand Cayman Seven Mile Beach Resort & SPA” and “Sunshine Suites Resort” (collectively, the “Cayman
Hotels”) as underlying assets for the first time ever in J-REIT history. In September 2018, INV implemented theinvestment in the Cayman Hotels via a global offering of new investment units and borrowing of funds. INV intends toimprove both the profitability and stability of the portfolio through such investments, including investment in the Cayman
Hotels, which is expected to even out the effects of seasonality in INV’s portfolio.
In the Fiscal Period ended December 31, 2019 (“Reporting Period”), INV implemented a global offering of new
investment units for the sixth consecutive year and acquired eighteen domestic hotels mainly in “prime tourism areas(Note 3)”. In addition, INV decided to sell two residential properties on December 9, 2019, completing the sale of one
property on December 17, 2019. This illustrates INV’s proactive asset management and a continuation of it asset
recycling initiatives, in which it sold two residential assets at a 3.4% NOI yield, and used part of the proceeds to acquire
two hotels in January 2020 at a 5.8% NOI yield. As a result, INV's portfolio at the end of Reporting Period comprisedof 147 properties (84 hotels (Note 4) (Note 5), 61 residential properties and two others) with a total acquisition price of
JPY 497,979 million (Note 6). The total acquisition price of the portfolio has significantly grown by 6.9 times,
compared to the portfolio as of May 22, 2014, which is the date immediately prior to INV’s initial investment in hotels.

- 11 -

Furthermore, INV’s hotel portfolio has reached the largest asset size (Note 7) of JPY 434.3 billion (84 properties, 14,665
rooms) among all J-REIT hotel portfolios including hotel-and-inn-specific type investment corporations.
(Note 1)US Eastern Standard Time

(Note 2)As of July 2011, Calliope owned 97.35% of issued shares of the Asset Manager and the investment ratio reached100% in October 2013. Calliope transferred 80.0% of issued shares to Fortress CIM Holdings L.P., a subsidiaryof SoftBank Group and 20.0% to SoftBank Group on March 29, 2018. As of the date of this document,
SoftBank Group owns 100% of issued shares of the Asset Manager directly and indirectly.

(Note 3)

“Prime tourism areas” refer to an area where INV has determined that there are tourist resources in thesurrounding area that have the ability to attract tourists and that demand for accommodation can be expected
mainly for foreign tourists visiting Japan (inbound visitors). Hereinafter the same shall apply.

(Note 4)The preferred equity interest held by INV is counted as one property. Such preferred equity interest issued
by a special purpose company (tokutei mokuteki kaisha) refers to 178,458 units of the preferred equity interest
issued by Kingdom Special Purpose Company (the “TMK”) (equivalent to 49.0% of the total issued andoutstanding preferred equity interest), which owns the trust beneficiary interest of the Sheraton Grande Tokyo
Bay Hotel as an underlying asset. The property is classified as a hotel, based on the use of Sheraton GrandeTokyo Bay Hotel, the underlying asset of the preferred equity interest, and INV’s investment amount of thepreferred equity interest is used as the acquisition price of the preferred equity interest, unless otherwise stated.
The “underlying asset” refers to the real estate or the real estate related assets owned by a TK operator of TK
interest or a TMK relating to the preferred equity interest which INV owns, thus the real estate or the realestate related assets which will be the revenue source of INV. Hereinafter the same shall apply.

(Note 5)

From September 28, 2018 (Cayman Island local time; September 29, 2018 in Japan local time), INV owned
100% of the TK interest in Seven Mile Resort Holdings Ltd. (the “Cayman SPC”), a Cayman Islands special
purpose company that holds leasehold interests in the Cayman Hotels and ancillary assets as underlying assets.
However, INV implemented the investment structure change (the “Structure Change” in some cases
hereinafter) regarding the Cayman Hotels on May 9, 2019 (Cayman Island local time; May 10, 2019 in Japan
local time) and has directly held the Leasehold Interests, etc. of the Cayman Hotels thereafter. Both of the
TK interest and the Cayman Hotels are counted as two properties before and after the Structure Change. In
addition, the “Leasehold Interests, etc.” means leasehold interests (rights equivalent to long-term real estateleases on land and buildings under the British Cayman laws) and furniture, fixtures, equipment, ornaments,
kitchen instrument, and other assets required for hotel operations. Hereinafter the same shall apply.

(Note 6)

Due to the Structure Change, the book value of the leasehold interests of the Cayman Hotels
recorded by the Cayman SPC as of May 9, 2019 (Cayman Island local time; May 10, 2019 in Japan
local time), when INV succeeded the leasehold interests of the Cayman Hotels from the Cayman
SPC via distribution in kind in connection with the termination of TK agreement, is deemed as theacquisition price of the Cayman Hotels. The book value is converted into JPY amount via
exchange rate of USD 1=JPY 110.45 based on the foreign exchange forward contracts executed on
July 26, 2018 and implemented on September 26, 2018 in connection with the investment in the TK
interest by INV. Hereinafter the same shall apply.

(Note 7) “The largest asset size … among all J-REIT hotel portfolios” refers to the total acquisition price of 84
hotels owned by INV as compared with the total acquisition price of hotels (including inns andother accommodation facilities) owned by listed investment corporations other than INV as ofDecember 31, 2019.

- 12 -

(b)Operational Environment and Performance

For the December 2019 period, the portfolio NOI (Note 1) increased by 16.3% or JPY 2,124 million to JPY 15,164
million compared to the same period in the previous year (the December 2018 period). The hotel portfolio NOI
increased by JPY 2,882 million, which is equivalent to the increase by 22.1% of the portfolio NOI. While the residential
portfolio has been benefitting from internal growth, NOI for the residential portfolio declined by JPY 757 million, whichis equivalent to the decrease by 5.8% of the portfolio NOI, due to asset sales as part of INV’s asset recycling. The
portfolio continued to maintain a high average occupancy rate (Note 2) of 99.3% for the period.
Commentary on hotel and residential performance in the Reporting Period is as described below.
The NOI for the Reporting Period of the 55 domestic hotels (Note 3) owned by INV decreased by 12.2% compared tothe same period in the previous year (figures exclude nine domestic hotels with fixed-rent lease agreements among the64 domestic hotels owned by INV as at the beginning of the December 2019 Fiscal Period, including Sheraton GrandeTokyo Bay Hotel, the underlying asset of the preferred equity interest of TMK owned by INV). The 55 domestic hotels
recorded an occupancy rate (Note 4) of 89.2% (-1.4 points YoY), ADR (Note 5) of JPY 10,705 (-4.8% YoY), and RevPAR(Note 6) of JPY 9,550 (-6.3% YoY). Fixed rent revenues accounted for 54.9% (JPY 6,478 million) of total hotel revenue
and variable rent revenues accounted for 45.1% (JPY 5,317 million) of total hotel revenue (figures are based on the 81
domestic hotels as of the end of the December 2019 Fiscal Period, and excludes Sheraton Grande Tokyo Bay Hotel, theunderlying asset of the preferred equity interest of TMK owned by INV).
Westin Grand Cayman Seven Mile Beach Resort & Spa and Sunshine Suites Resort continues to perform extremely welland recorded an average occupancy rate of 72.3% (-4.8 points YoY), ADR of USD 327 (+11.9% YoY), and RevPAR of
USD 237 (+4.9% YoY).
Regarding the hotel sector in Japan, the number of inbound visitors reached a record high of 31.88 million (+2.2% YoY)
for January through December 2019, and the trend is in line with the government targets of 40 million inbound visitors
in 2020 and 60 million inbound visitors in 2030. Japan will host the Tokyo Olympic Games in 2020, which are
anticipated to further increase attention to Japan driving further growth of inbound tourism. In the Cayman Islands,
where the Cayman Hotels are located, the expansion of the Owen Roberts International Airport located in the Grand
Cayman Island was completed on March 29, 2019. The airport expansion has significantly expanded its capacity andcan now accommodate 2.7 million passengers annually, up from the old and overstretched capacity of 0.5 million
passengers. The airport expansion will also facilitate additional airlift to the islands, increasing lodging demand. In
2019, air visitor arrivals to the Cayman Islands increased by 8.6% year-over-year.
Regarding the residential portfolio, the average occupancy rate of 62 residential properties (Note 7) for the Reporting
Period was 96.3%, an increase of 0.3 points compared to the same period in the previous year. The NOI (Note 8) of the
62 residential properties for the Reporting Period increased by 0.8% compared to the same period in the previous year,
due to internal growth through solid rent increases despite the sale of Winbell Kagurazaka. For the residential sector,
trends for rent at city-center residential properties with small-type rooms maintained a moderate increase. Under such
positive circumstances in the macro environment, INV continues to focus on its rent increase program for both new leases
and renewals as well as initiatives to reduce residential leasing costs based on a detailed market analysis of each property
and unit.
In the Reporting Period, INV realized a rent increase for 44.4% (based on the number of contracts) of the new residential
lease contracts for an average rent increase of 0.3% compared to the previous rent across all new leases (Note 9). INV
achieved a rent increase for 43.2% (based on the number of contracts) of contract renewals for an average rent increaseof 1.4% compared to the previous rent across all renewal leases (Note 9), while maintaining a high contract renewal rate
(Note 10) of 83.2%. Combined, new leases and renewal leases were signed at 1.0% higher than the previous leases(Note 9).
The total appraisal value of 146 properties was JPY 557,099 million (1 out of the 147 properties owned by INV at theend of the Reporting Period is excluded from the appraisal calculation: Sheraton Grande Tokyo Bay Hotel (preferred- 13 -

equity interest) for which appraisal value of such interest is not available). The portfolio has an unrealized gain of JPY
91,516 million (Note 11) and an unrealized gain ratio of 19.7% (Note 11). The total appraisal value of 128 properties
which were owned throughout the Reporting Period increased by 1.0% from JPY 467,843 million at the end of June 2019
period to JPY 472,740 million at the end of the Reporting Period.

Key Performance Indicators of 55 Domestic Hotel Properties (Note 3)
December 2019 fiscal period

Year-on-year change

Occupancy Rate (Note 4)

89.2%-1.4ptADR (JPY) (Note 5)

10,705-4.8%

RevPAR (JPY) (Note 6)

9,550

-6.3%

GOP (JPY million) (Note 12)9,746-10.8%Key Performance Indicators of Cayman Hotels
December 2019 fiscal period

Year-on-year change

Occupancy Rate (Note 4)

72.3%-4.8ptADR (USD) (Note 5)327+11.9%

RevPAR (USD) (Note 6)

237

+4.9%

GOP (USD) (Note 12)

13,277,720+2.2%

Key Performance Indicators of 64 Residential Properties (Note 7)
December 2019 fiscal period
Occupancy Rate (Note 1)
Average Rent per Tsubo per Month(JPY) (Note 13)
NOI (JPY million) (Note 8)

Year-on-year change

96.3%+0.3pt

9,386

+0.4%

1,804

+0.8%

(Note 1)

“NOI” for the hotel properties is calculated in accordance with the following formula:
NOI ＝ Rental Revenues ‐ Property-Related Expenses + Depreciation Expenses + Dividend on the preferred
equity interest (TMK dividend) + TK distribution of the Cayman Hotels + (Management Contract Revenueof the Cayman Hotels‐Management Contract Expense)(Note 2)

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

(Note 3)Of the 64 hotels held as of the beginning of the December 2019 Fiscal Period (including the Sheraton GrandeTokyo Bay Hotel, the underlying asset of the preferred equity interest of TMK owned by INV), the following
9 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. It is assumed that all properties acquired after January 2018 by INV had been owned since
January 1, 2018. The actual results before acquisition by INV are based on the data provided by the sellers.

(Note 4)

“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)- 14 -

Hereinafter the same shall apply.
(Note 5)“ADR” means average daily rate, and is calculated by dividing total room sales (excluding service fees) for acertain period by the total number of rooms sold during the same period. Hereinafter the same shall apply.

(Note 6)

“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 7)

Based on the 62 residential properties owned as of the beginning of December 2019 Fiscal Period. Therefore,
for Winbell Kagurazaka, July 1, 2019 through December 16, 2019, the day immediately preceding the saledate, is deemed as the operating period for the December 2019 fiscal period, and the leased area and theleasable area as of December 16, 2019 are deemed as those as of the end of December 2019 to calculate eachnumber. Hereinafter the same shall apply. In addition, the figures for the properties acquired after June2018 are calculated on the assumption INV had acquired those properties on July 1, 2018, using the actual
figures provided by the sellers of such properties for the period before the acquisition.

(Note 8)For the comparison of NOI, insurance income and related repair expenses, which are temporary items, as well
as expenses required to detach trust beneficiary interest from an integrated trust account are excluded.

(Note 9)

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 10) 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 11) Unrealized gain is calculated using the following formula: the appraisal value as of the end of the Reporting
Period - book value as of the end of the Reporting Period.
Unrealized gain ratio is calculated using the following formula: unrealized gain ÷ book value as of the end of
the Reporting Period.
(Note 12) “GOP” means the gross operating profit or rental revenue INV receives as rent, 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 to operators (if any) from the hotel’s revenues. Moreover, GOP for theSheraton Grande Tokyo Bay Hotel has been multiplied by 49%, or INV’s ownership ratio of the preferred
equity interest. Hereinafter the same shall apply.
(Note 13) “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 (tsubo) at the end of each month during therelevant period.

- 15 -

(c)Overview of Fund Raising

As a result of the measures described below, INV’s interest-bearing debt outstanding balance was JPY 259,174 million
and the Interest-Bearing Debt ratio (Note 1) and LTV (appraisal value basis) (Note 2) were 49.1% and 44.6% respectively,
as of the end of the Reporting Period, with an average interest rate (Note 3) of 0.55%.
(Note 1)

(Note 2)(*)

(Note 3)

Interest-Bearing Debt ratio uses the calculation formula below:
Interest-Bearing Debt ratio = total outstanding interest-bearing debt (excluding short-term consumption tax
loans)/total assets x 100
LTV (appraisal value basis) uses the calculation formula below:
LTV = total outstanding interest-bearing debt (excluding short-term consumption tax loans)/total appraisal
value (*) x 100
Since appraisal value for Sheraton Grande Tokyo Bay Hotel (preferred equity interest) is not available, theacquisition price of the preferred equity interest (JPY 17,845 million) is deemed as appraisal value of Sheraton
Grande Tokyo Bay Hotel (preferred equity interest).
The average interest rate (annual rate) is calculated by the weighted average based on the outstanding balanceof borrowings and rounded to two decimal places.

(i) Equity Financing
INV implemented a global public offering which closed on July 18, 2019 (the number of new investment units issued:
409,524; total issue value: JPY 23,317 million) and a third party allotment which closed on August 15, 2019 (the numberof new investment units issued: 20,476; total issue value: JPY 1,165 million) in order to procure part of the funds for theacquisition of eighteen domestic hotels described in “(d) Overview of Acquisition of Assets”.
(ii) Debt Financing
a. Borrowing of Funds
INV borrowed New Syndicate Loan (L) on July 19, 2019 (total amount borrowed: JPY 27,400 million; interest rate:variable interest rate of 1-month JPY TIBOR plus 0.70000%, 1-month JPY TIBOR plus 0.55000%, 1-month JPY TIBOR
plus 0.50000% (by the interest swap agreement, it is fixed, in effect, at 0.57984%), 1-month JPY TIBOR plus 0.45000%(by the interest swap agreement, it is fixed, in effect, at 0.52473%), 1-month JPY TIBOR plus 0.35000% (by the interest
swap agreement, it is fixed, in effect, at 0.41326%), and 1-month JPY TIBOR plus 0.20000% for durations of six, fiveand-a-half, five, four-and-a-half, three-and-a-half and one year), which was arranged by Mizuho Bank, Ltd. in order to
pay a portion of the acquisition price and related expenses for the acquisition of the eighteen domestic hotels describedin “(d) Overview of Acquisition of Assets” with the equity financing described in the said (i).
Furthermore, INV borrowed New Syndicate Loan (M) on July 16, 2019 (total amount borrowed: JPY 28,979 million;interest rate: variable interest rate of 1-month JPY TIBOR plus 0.70000%, 1-month JPY TIBOR plus 0.55000%, 1-month
JPY TIBOR plus 0.50000% (by the interest swap agreement, it is fixed, in effect, at 0.56310%), 1-month JPY TIBOR
plus 0.45000% (by the interest swap agreement, it is fixed, in effect, at 0.49859%) and 1-month JPY TIBOR plus
0.35000% (by the interest swap agreement, it is fixed, in effect, at 0.40000%) for durations of six, five-and-a-half, five,four-and-a-half and three-and-a-half years), which was arranged by Mizuho Bank, Ltd. in order to repay New Syndicate
Loan (E) in the amount of JPY 28,979 million due on July 16, 2019.
Additionally, INV borrowed Term Loan (L) on July 22, 2019 (total amount borrowed: JPY 700 million; interest rate:variable interest rate of 1-month JPY TIBOR plus 0.70000% for duration of six years), which was arranged by The Tokyo
Star Bank, Limited in order to repay Term Loan (E) in the amount of JPY 700 million due on July 20, 2019. This
repayment deadline was a holiday (a day other than a business day) and thus the repayment date was July 22, 2019, thenext business day, according to the provisions of the agreement.
Moreover, INV borrowed New Syndicate Loan (N) on August 28, 2019 (total amount borrowed: JPY 3,682 million;interest rate: variable interest rate of 1-month JPY TIBOR plus 0.45000% (by the interest swap agreement, it is fixed, in
effect, at 0.46219%) for duration of four-point-four years), which was arranged by Mizuho Bank, Ltd. in order to repay- 16 -

Term Loan (A) in the amount of JPY 3,682 million due on August 28, 2019.
In addition, INV borrowed New Syndicate Loan (O) on October 15, 2019 (total amount borrowed: JPY 3,700 million;interest rate: variable interest rate of 1-month JPY TIBOR plus 0.70000%, 1-month JPY TIBOR plus 0.55000%, 1-month
JPY TIBOR plus 0.45000% (by the interest swap agreement, it is fixed, in effect, at 0.48590%) for durations of six, fiveand-a-half, and four-and-a-half years), which was arranged by Mizuho Bank, Ltd. in order to repay New Syndicate Loan
(H) in the amount of JPY 3,700 million due on October 13, 2019. This repayment deadline was a holiday (a day otherthan a business day) and thus the repayment date was October 15, 2019, the next business day, according to the provisionsof the agreement.
As described in “6 Significant Subsequent Events (a) Debt Financing”, INV decided to borrow New Syndicate Loan(P) on December 9, 2019 and borrowed on January 6, 2020 (total amount borrowed: JPY 6,980 million; interest rate:variable interest rate of 1-month JPY TIBOR plus 0.50000% (by the interest swap agreement, it is fixed, in effect, at
0.64291%), 1-month JPY TIBOR plus 0.30000% (by the interest swap agreement, it is fixed, in effect, at 0.41687%) and1-month JPY TIBOR plus 0.20000% for durations of five, three and one year), which was arranged by Sumitomo Mitsui
Trust Bank, Limited in order to pay a portion of the acquisition price and related expenses for the acquisition of the twodomestic hotels described in “6 Significant Subsequent Events (b) Acquisition of Assets”.
In addition, a portion of INV’s existing loans from The Tokyo Star Bank, Limited of JPY 1,600 million was transferred
to THE TOWA BANK, LTD. in the amount of JPY 1,000 million on December 25, 2019.

b. Issuance of Investment Corporation Bonds
INV issued its investment corporation bonds as follows for the purpose of raising a portion of funds for strategic capital
expenditures to enhance the competitiveness and added value of existing properties, while at the same time lowering its
financing costs, lengthening the average maturity period of its debt and further diversifying repayment dates for interestbearing debt.
Bond Series

Issue Date

Fourth Series Unsecured
Investment Corporation Bonds(with pari passu conditions
among specified corporate
bonds)

October 28,
2019

Fifth Series Unsecured
Investment Corporation Bonds(with pari passu conditions
among specified corporate
bonds)

October 28,
2019

Total Amount /Average Interest Rate

Redemption
Date

Abstract

0.480%

October 28,
2024

Unsecured /Unguaranteed
Rating: A+
(JCR)

2,000

0.900%

October 26,
2029

Unsecured /Unguaranteed
Rating: A+
(JCR)

3,000

0.760%

Issue Amount Interest Rate
(JPY million) (annual rate)

1,000- 17 -

(d)Overview of Acquisition of Assets

The Asset Manager decided on the acquisition of trust beneficiary interests in eighteen domestic hotels as follows on July
1, 2019, and acquisition of the assets was closed on July 19, 2019.

Property Name

Acquisition
Price(JPY million)(Note 1)

Appraisal Value(JPY million)(Note 2)

D64

Hotel MyStays Sapporo
Aspen

15,54315,700Touyako Godo Kaisha

D65

Art Hotel Ishigakijima

9,731

9,830

Yaeyama Resort Hotel
Tokutei Mokuteki Kaisha

D66

Hotel MyStays Fuji Onsen
Resort

9,405

9,500

Saturnia Tokutei Mokuteki
KaishaD67

Hotel Sonia Otaru

5,930

5,990

Shirahama Tokutei
Mokuteki Kaisha

D68

Hotel MyStays Kanazawa
Castle

5,682

5,740

Calvis Tokutei Mokuteki
KaishaD69

Art Hotel Niigata Station

5,524

5,580

HL Investments 2 Tokutei
Mokuteki Kaisha

D70

Hotel MyStays Nagoya
Nishiki

5,197

5,250

Shirahama Tokutei
Mokuteki Kaisha

D71

Hotel Nord Otaru

4,296

4,340

Shirahama Tokutei
Mokuteki Kaisha

D72

Hotel MyStays Kagoshima
Tenmonkan

3,445

3,480

Kawaguchiko Tokutei
Mokuteki Kaisha

D73

Art Hotel Asahikawa

3,197

3,230

Shirahama Tokutei
Mokuteki Kaisha

D74

Hotel MyStays Matsuyama

3,098

3,130

Calvis Tokutei Mokuteki
KaishaD75

Hotel MyStays Sapporo
Susukino

3,059

3,090

Kawaguchiko Tokutei
Mokuteki Kaisha

D76

Hotel MyStays Sapporo
Nakajima Park

2,118

2,140

Shirahama Tokutei
Mokuteki Kaisha

D77

Hotel MyStays Sapporo
Nakajima Park Annex

1,584

1,600

Shirahama Tokutei
Mokuteki Kaisha

D78

Flexstay Inn Sakuragicho

1,425

1,440

Calvis Tokutei Mokuteki
KaishaProperty
Number- 18 -

SellerProperty
Number

Property Name

Acquisition
Price(JPY million)(Note 1)

Appraisal Value(JPY million)(Note 2)

D79

MyCUBE by MYSTAYS
Asakusa Kuramae

1,287

1,300

Calvis Tokutei Mokuteki
KaishaD80

Hotel MyStays Kagoshima
Tenmonkan Annex

1,168

1,180

Kawaguchiko Tokutei
Mokuteki Kaisha

D81

Hotel MyStays Nayoro

957

967

Kawaguchiko Tokutei
Mokuteki Kaisha

82,646

83,487

Total(Note 1)
(Note 2)(e)Seller-Acquisition Price does not include adjustments for property taxes, city planning taxes, or national or local
consumption taxes. Hereinafter the same shall apply.
Appraisal Value is based on appraisal value stated in the appraisal report by the Japan Real Estate Institute.,
The Tanizawa Sōgō Appraisal Co., Ltd. or Daiwa Real Estate Appraisal Co., Ltd. on the valuation date ofApril 1, 2019.

Overview of Sale of Assets

The Asset Manager decided to sell two residential properties, City House Tokyo Shinbashi and Winbell Kagurazaka on
December 9, 2019 in order to improve the profitability of the portfolio through the previously mentioned accretive asset
recycling, as well as stabilizing future distributions by retaining the gain from sales as internal reserves. The sale ofWinbell Kagurazaka was completed on December 17, 2019 and the sale of City House Tokyo Shinbashi was completed
on January 15, 2020. The overview of the sold assets are as follows. A portion of the proceeds from the sales wereused to fund a portion of the acquisition and the related expenses described in “6 Significant Subsequent Events (b)Acquisition of Assets”.

Property
NumberA51

A52

Property Name

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

Book Value
Sale Price(JPY million) (JPY million)(Note 1)
(Note 2)

(Estimated)
Gain on Sale
(JPY million)(Note 3)

City HouseTokyo
Shinbashi

2,520

WinbellKagurazaka

3,260

2,992

5,135

1,970

5,780

5,262

9,600

4,013

Total
(Note 1)

Acquisition
Price(JPY million)

2,269

4,465

Transferee

2,043
Undisclosed(Note 4)-

Book Value shows figures as of December 31, 2019 for City House Tokyo Shinbashi and as of the date ofsale for Winbell Kagurazaka.
Sale Price does not include transfer related cost, adjustments for fixed asset taxes or city planning taxes,
or national or local consumption taxes.
Gain on Sale is calculated by deducting the Book Value and transfer related cost (estimated transfer related
cost for City House Tokyo Shinbashi) from Sale Price.
The name of the transferee is not disclosed, as the transferee’s consent has not been obtained for disclosure.
Amounts are rounded down to the nearest million yen.

- 19 -

(f)Overview of Results of Operations and Distributions

As a result of the operations mentioned above, operating revenues for the Reporting Period decreased by JPY 8,752
million from the previous period (-32.0%) to JPY 18,587 million, net income decreased by JPY 9,600 million (-45.2%)
to JPY 11,638 million and unappropriated retained earnings including the retained earnings carried forward from thepreceding fiscal period (JPY 11,622 million) reached JPY 23,261 million.
INV believes that maintaining the stability of cash distributions over the medium term is one of the most important factors
in determining the amount of distribution for a given fiscal period. With respect to the Reporting Period, INV reserved
a portion of net income increased due to the sale of Winbell Kagurazaka, and aims to maintain stable distributions in the
future. INV reserved JPY 1,121 million of net income as internal reserve and decided that distribution per unit
(excluding excess profit distribution) is JPY 1,725 and does not make distributions in excess of profits.

- 20 -

3

Changes in Total Number of Investment Units Issued and Outstanding

Changes in the number of investment units issued and outstanding and unitholders’ capital for the past 10 years up to the endof the Reporting Period are as follows.

Date

Type of issue

Total number of investment
units issued and outstanding(units) (units)
Increase
Total

Unitholders’ capital (JPY)
Increase

Reference

Total

February 1, 2010

Unit split

215,596

269,495-

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

Merger367,200

636,695-

19,134,417,100(Note 2)

711,597

1,348,292

6,999,979,689

26,134,396,789(Note 3)

224,887

1,573,179

2,999,992,580

29,134,389,369(Note 4)

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 5)

August 13, 2014

Third-party
allotment

55,5072,668,686

1,214,104,611

53,096,413,980(Note 6)

July 15, 2015

Public offering

500,000

3,168,686

27,970,500,000

81,066,913,980(Note 7)

August 12, 2015

Third-party
allotment

25,0003,193,686

1,398,525,000

82,465,438,980(Note 8)March 30, 2016

Public offering

459,5123,653,198

36,123,157,344

118,588,596,324(Note 9)22,626

3,675,824

1,778,675,112

120,367,271,436(Note 10)-

3,675,824

224,225,264

120,591,496,700(Note 11)

April 27, 2016

February 22, 2017

Third-party
allotment
Reversal of
allowance fortemporarydifferences
adjustment

March 13, 2017

Public offering

185,000

3,860,824

8,393,450,000

128,984,946,700(Note 12)October 12, 2017

Public offering

887,959

4,748,783

37,917,625,218

166,902,571,918(Note 13)

November 1, 2017

Third-party
allotment

44,3984,793,181

1,895,883,396

168,798,455,314(Note 14)

August 1, 2018

Public offering

909,524

5,702,705

40,280,089,388

209,078,544,702(Note 15)

August 21, 2018

Third-party
allotment

45,476

5,748,181

2,013,995,612

211,092,540,314(Note 16)

December 28, 2018

Retirement(81,341)

5,666,840-

211,092,540,314(Note 17)

July 18, 2019

Public offering

409,524

6,076,364

23,317,887,036

234,410,427,350(Note 18)

235,576,310,314(Note 19)

235,701,512,169(Note 20)

Third-party
20,476
6,096,840
1,165,882,964
allotment
Reversal of
allowance for
6,096,840
125,201,855
August 22, 2019
temporarydifferences
adjustment(Note 1) An investment unit split of five units per one unit was conducted.
August 15, 2019

(Note 2)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, four

- 21 -

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 3)New investment units were issued in a third-party allotment at a price of JPY 9,837 per unit to make repaymentof existing loan, etc.

(Note 4)

New investment units were issued in a third-party allotment at a price of JPY 13,340 per unit to make repaymentof existing loan, etc.

(Note 5)New investment units were issued in a public offering at a price of JPY 22,688 per unit (JPY 21,873 after
deducting the underwriters’ discount) to raise funds for the acquisition of new properties.

(Note 6)

New investment units were issued in a third-party allotment at a price of JPY 21,873 per unit for the purposeof cash reserve to appropriate to repayment in future borrowings.

(Note 7)

New investment units were issued in a public offering at a price of JPY 57,817 per unit (JPY 55,941 after
deducting the underwriters’ discount) to raise a part of the funds for the acquisition of new properties.

(Note 8)New investment units were issued in a third-party allotment at a price of JPY 55,941 per unit for the purposeof allocation to cash reserves to be used as part of the funds for future acquisition of properties.

(Note 9)New investment units were issued in a public offering at a price of JPY 81,217 per unit (JPY 78,612 after
deducting the underwriters’ discount) to raise a part of the funds for the acquisition of new properties.

(Note 10) New investment units were issued in a third-party allotment at a price of JPY 78,612 per unit for the purposeof allocation to cash reserves to be used as a part of the funds for future acquisition of specified assets.
(Note 11) INV decided at the Board of Directors' Meeting held on February 22, 2017, the reversal of allowance fortemporary difference adjustments for incorporation into unitholders' capital.
(Note 12) New investment units were issued in a public offering at a price of JPY 46,897 per unit (JPY 45,370 after
deducting the underwriters’ discount) to raise a part of the funds for the acquisition of new properties.
(Note 13) New investment units were issued in a public offering at a price of JPY 44,118 per unit (JPY 42,702 after
deducting the underwriters’ discount) to raise a part of the funds for the acquisition of new properties.
(Note 14) New investment units were issued in a third-party allotment at a price of JPY 42,702 per unit for the purposeof allocation to cash reserves to be used as part of the funds for future acquisition of specified assets.
(Note 15) New investment units were issued in a public offering at a price of JPY 45,776 per unit (JPY 44,287 after
deducting the underwriters’ discount) to raise a part of the funds for the acquisition of new properties.
(Note 16) New investment units were issued in a third-party allotment at a price of JPY 44,287 per unit for the purposeof raising a part of the funds for the acquisition of new properties.
(Note 17) INV acquired own investment units from December 13, 2018 to December 18, 2018 (on a trade date basis)through the market purchase at Tokyo Stock Exchange based on a discretionary transaction contract with asecurities company.
INV resolved the retirement of all the acquired own investment units at the Board of Directors' Meeting held
on December 25, 2018 and the acquired own investment units were retired on December 28, 2018.
The acquisition of own investment units was conducted using capital surplus, and thus there is no change tounitholders’ capital.
(Note 18) New investment units were issued in a public offering at a price of JPY 58,898 per unit (JPY 56,939 after
deducting the underwriters’ discount) to raise a part of the funds for the acquisition of new properties.
(Note 19) New investment units were issued in a third-party allotment at a price of JPY 56,939 per unit for the purposeof raising a part of the funds for the acquisition of specified properties.
(Note 20) INV decided at the Board of Directors' Meeting held on August 22, 2019, the reversal of allowance fortemporary difference adjustments for incorporation into unitholders' capital.

- 22 -

Trends in Trading Prices of Investment Securities
The highest and lowest prices (trading prices) in the Real Estate Investment and Trust Securities Section of the Tokyo Securities
Exchange on which the investment securities of INV are listed are as follows.
Real Estate Investment and Trust Securities Section, Tokyo Securities Exchange(Unit: JPY)
PeriodClosing month
HighestLowest29th fiscal
period30th fiscal
period31st fiscal
period32nd fiscal
period33rd fiscal
periodDecember
2017
50,200June
2018
53,000December
2018
51,000June
201960,700December
2019
70,60044,45046,65044,80044,30055,700- 23 -

4

Distribution PerformanceWith respect to distributions of earnings for the Reporting Period, INV reserved a portion of net income increased due to thesale of Winbell Kagurazaka, and aims to maintain stable distributions in the future. INV reserved JPY 1,121 million of net
income as internal reserve and decided that distribution per unit (excluding excess profit distribution) is JPY 1,725 and does
not make distributions in excess of profits.

PeriodCalculated Period
Unappropriated retained
earnings(JPY thousand)Reserved profit(JPY thousand)Total cash distribution(JPY thousand)(Distribution per unit) (JPY)
Total profit distribution(JPY thousand)(Profit distribution per unit)(JPY)
Total refund of investment(JPY thousand)(Refund of investment per
unit)
(JPY)
Total distribution from theallowance for temporary
differences adjustment out of
total refund of investment(JPY thousand)(Distribution from theallowance for temporary
differences adjustment per unit
out of refund of investment perunit) (JPY)
Total distribution fromunitholders’ equity under the
tax laws out of the total refundof investment(JPY thousand)Distribution from unitholders’equity under the tax laws outof refund of investment per
unit
(JPY)

29th fiscal
periodJul. 1, 2017 to
Dec. 31, 201730th fiscal
periodJan. 1, 2018 toJun. 30, 2018

31st fiscal
periodJul. 1, 2018 to
Dec. 31, 2018

32nd fiscal
periodJan. 1, 2019 toJun. 30, 2019

33rd fiscal
periodJul. 1, 2019 toDec. 31, 2019

7,212,580

7,610,548

9,140,372

21,131,966

23,261,426-111,399

756,300-107,910

11,622,477

12,744,377

7,496,535

6,854,248

9,537,291

9,384,287

10,517,049(1,564)(1,430)(1,683)(1,656)(1,725)

7,323,980

6,854,248

9,248,282

9,384,287

10,517,049(1,528)(1,430)(1,632)(1,656)(1,725)

172,554-

289,008

-

-

(36)

(-)

(51)

(-)

(-)

-

-

85,002

-

-

(-)

(-)

(15)

(-)

(-)

172,554-204,006

-

-

(36)

(-)

(36)

(-)

(-)

- 24 -

5

Future operational policy and issues to be addressed
Outlook for the Fiscal Periods Ending June 30, 2020 and December 31, 2020
The DPU for the June 2020 fiscal period and December 2020 fiscal period are forecasted to be JPY 1,812 (+9.4% YoY)
and JPY 1,647 (-4.5% YoY), respectively. The full year DPU for calendar year 2020 is forecasted to be JPY 3,459(+2.3% YoY), providing expected continued steady growth.
a.

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. Since Fortress Group joined under the umbrella of SoftBank Group in December 2017
and SoftBank Group owns 100% of issued shares of the Asset Manager directly and indirectly as of March 29, 2018, in
addition to continued access to Fortress’ global real estate expertise, INV will seek to leverage the resources that are
expected to become available through SoftBank Group. SoftBank Group has market-leading expertise in technology
fields such as digital marketing for both mobile and desktop, online payment systems, search engine optimization, AI androbotics. INV believes that deployment of technology into INV’s real estate assets, especially its hotels, will enhanceongoing initiatives to improve its digital marketing, minimize labor costs and increase customer engagement. For
example, INV plans to pursue opportunities to better manage the increased number of foreign visitors and their related
online research, bookings and payments, the process in setting hotel rates and overbooking through the use ofsophisticated AI algorithms, and reduce labor costs while enhancing customer service through the use of robotics.
In addition to pursuing synergies with SoftBank Group, going forward, INV will continue to implement various strategies
to maintain further growth and financial stability, including the following measures.

Further external growth utilizing sponsor supportProperty acquisition from third parties with the aim of expanding the AUM

Property acquisitions using the proceeds from asset recyclingFurther internal growth at hotel and residential properties

Diversification of funding sources through the issuance of investment corporation bonds and bylengthening the average maturity period of its debt

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

External growth strategy
New Property Acquisitions

As its basic strategy, INV will acquire properties focusing on hotels where continued growth in portfolio revenues isanticipated and residential properties where rent increase can be achieved. Rent revenue from residential assets andother assets as well as the fixed rent portion from hotels will contribute to more stable revenue, which was 60.4% of total
revenue (Note 1). This acquisition strategy will enable INV to build a portfolio with a good balance between growthand stability.
In regards to hotels, INV will take into consideration the trends in foreign travelers visiting Japan, demands of businessand leisure customers in nearby areas, and leasing contract types when making investment decisions, with the aim ofacquiring properties where growth and stability of GOP and rental revenue are forecasted to increase.
In regards to residential properties, INV will analyze occupancy rates, rental market trends, the presence of competing
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.

- 25 -

Properties Acquired from affiliates of the Fortress Group (as of August 31, 2019)
Date

Properties acquired

Total acquisition price

September 2012
May 2014

24 residential properties (Note 2)
Two hotels

JPY 14,043 million (Note 2)
JPY 5,435 million

July 2014
February 201518 hotels
Two hotels

JPY 39,938 million
JPY 4,911 million

July 2015
August 2015

11 hotels andthree residential properties
One hotel

JPY 35,258 million
JPY 5,069 million

January 2016

Five hotels andone residential property

JPY 10,207 million

March 2016

Four hotels andone residential property

JPY 66,697 million

June 2016
March 2017

Two hotels
Two residential properties

JPY 15,900 million
JPY 24,562 million

May 2017
October 2017

One hotel
Five hotels (Note 3)

JPY 8,000 million
JPY 57,444 million (Note 3)

February 2018
June 2018

Four hotels
Two hotels

JPY 12,425 million
JPY 7,325 million

August 2018
September 2018

Four hotels
Two hotels (Note 4)

JPY 47,747 million
JPY 36,783 million (Note 4)

July 2019
January 2020

18 hotels
Two hotels

JPY 82,646 million
JPY 16,236 million

Total

114 properties(of which 83 are hotels and 31 areresidential properties)

JPY 490,627 million(of which hotels: JPY 438,989 million;
residential: JPY 51,638 million)

The Fortress Group manages five dedicated Japanese real estate funds, including the Fortress Japan Opportunity Funds
I, II, III and IV. The Fortress Group’s committed equity is over JPY 450 billion and the number of properties that the
Fortress Group is invested in exceeds 3,500. In order to ensure future growth options for the portfolio, INV entered into
an MOU with affiliates of the Fortress Group that provides preferential negotiation rights with respect to the acquisitionof two hotels and seven residential properties as of February 29, 2020 (see the table below) (Note 5). In addition, by
utilizing the property transaction information available through the Fortress Group and the Asset Manager’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.
No.

Asset name1

Rihga Royal Hotel Kyoto

2

Location

Asset type (Note 6)

No. of rooms

Kyoto, Kyoto

Full-Service Hotel

489

Fusaki Beach Resort Hotel & Villas

Ishigaki, Okinawa

Resort Hotel

333

3

Gran Charm Hiroo

Shibuya-ku, Tokyo

Residential/Small Type

121

4

Gran Charm Kichijoji

Musashino, Tokyo

Residential/Small Type28

5

Dainichi F‐45

Urayasu, Chiba

Residential/Small Type

54

6

Gran Charm Urayasu

Urayasu, Chiba

Residential/Small Type54

7

Gran Charm Urayasu 5

Urayasu, Chiba

Residential/Small Type54

8

Gran Charm Minami Gyotoku I

Ichikawa, Chiba

Residential/Small Type52

9Gran Charm Minami Gyotoku II

Ichikawa, Chiba

Residential/Small Type48

- 26 -

(Note 1)(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)

The percentage indicates composition of rent revenue based on the actual results for the fiscal period ended
December 2019. Sheraton Grande Tokyo Bay Hotel (the preferred equity interest) is excluded.
Of the properties acquired from affiliates of the Fortress Group, two residential properties (Sun Terrace
Minami-Ikebukuro and Royal Parks Tower Minami-Senju) have been sold.
Sheraton Grande Tokyo Bay Hotel acquired by a special purpose company, of which INV owns the preferred
equity interest, is counted as one property and the INV’s investment amount to the preferred equity interest
is deemed to be as the acquisition price of the preferred equity interest.
The acquisition of the Cayman Hotel TK Interest is counted as acquisition of the two properties in the table
above and INV’s investment amount to the TK interest is used as the acquisition price to the Cayman SPC
for the TK interest. After the Structure Change, INV currently has direct ownership of the Leasehold of the
Cayman Hotels.
The term of validity of the MOU is from July 1, 2019, the date of execution of the updated MOU, to June 30,
2020. However, regarding the nine 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. INV has nopreferential negotiation rights with respect to overseas assets.
Each “Asset Type” above is as follows:· “Full-Service Hotel” refers to a hotel generally having both restaurant facilities providing breakfast,
lunch and dinner (including meals provided by reservation) and meeting facilities that can be used forbanquet services.
· “Limited-Service Hotel” refers to a hotel that does not qualify as Full-Service Hotel.
· “Resort Hotel” refers to a hotel located in areas where a substantial number of guests stay for sightseeingor recreational purposes and includes both full-service hotels and limited-service hotels.
With respect to a hotel that falls within the definition of both a full-service hotel and a resort hotel, wecategorize the hotel as a full-service hotel if it has substantial demand for meeting room, banquet service,wedding service or food and beverage service (including demand from non-staying guests) and as aresort hotel in all other cases. With respect to a hotel that falls within the definition of both a limitedservice hotel and a resort hotel, we categorize the hotel as a resort hotel.
· “Small Type” refers to a residential property in which the majority of dwelling units are less than 30 m 2.

Property Sales
While INV places priority on increasing unitholders’ value through external growth given the increased level of activity
in the real estate trading market, it also considers the possibility of portfolio optimization upon consideration of theportfolio sector composition, geographic distribution and competitiveness of each property, as appropriate.

(ii) Strategy for internal growth(Hotels)
Of the 82 domestic hotels (Note 1) owned by INV as of the end of the Reporting Period, 73 hotels use a variable rent
scheme. In the variable rent scheme, in principle, INV receives all of gross operating profit (GOP) after deducting
payment of management fees for the hotel operator as rents. For 71 hotels of the 73 hotels, MHM and subsidiaries of
MHM have implemented sophisticated revenue management initiatives seeking to maximize revenue through effectively
taking in the accommodation demand. As a result, INV can directly enjoy the hotel revenue upside through this variable
rent scheme. For hotels, renovation of rooms and replacement of fixtures and fittings are indispensable to maintain andincrease revenues and operate stably in a planned manner.

(Residential properties and others)
INV will continue to strengthen its collaborative ties with PM and brokers to further boost occupancy rates and earning- 27 -

capabilities of its properties. With respect to INV’s residential properties, while keeping in mind the high-season in theresidential rental market during the June 2020 period, INV will focus on increasing the occupancy rates and rents for bothnew lease contracts and lease renewals for all of its properties as well 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 andenhancing the competitiveness and market value of the properties as well as ensuring high tenant satisfaction. Therefore,
INV will continue to monitor current strategic plans with flexible implementation as it sees fit.
(Note 1)

Including Sheraton Grande Tokyo Bay Hotel (the preferred equity interest).

(iii) Financial strategy
The credit rating from Japan Credit Rating Agency, Ltd. (JCR) has been changed as of February 4, 2020 as follows by
further making progress in reduction of funding costs, extending average interest-bearing debt repayment period,
diversification of interest-bearing debt repayment dates, and diversification of funding methods. Going forward, INV
seeks to maximize unitholders’ value through improvement of its credit rating by way of further reduction of borrowing
costs, extension of average interest-bearing debt repayment period, diversification of loan maturity dates and financing
measures.
Rating Object

Before Change

After Change

Long-term Issuer Rating(Outlook)A(Positive)A+(Stable)(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 each meeting of theBoard of Directors in the capacity of an observer.
The Asset Manager has a compliance officer who is responsible for compliance with laws, regulations and other relevant
matters as well as overall management of transactions with sponsor-related parties. Moreover, it has in place acompliance committee which, chaired by such compliance officer, is in charge of deliberating on compliance with laws,
regulations and other relevant matters as well as transactions with sponsor-related parties. Compliance committee
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-related parties 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.

- 28 -

6

Significant Subsequent Events(a)Debt Financing

INV decided to borrow New Syndicate Loan (P) on December 9, 2019 and borrowed on January 6, 2020 in order to pay
a portion of the acquisition price and related expenses for the acquisition of the two domestic hotels described in “(b)Acquisition of Assets”.
Borrowing
Date

LenderSumitomo Mitsui Trust Bank,
LimitedOutstanding
Balance(JPY million)

Interest Rate(annual rate)

Maturity
Date

4,550

Floating
interest rates(Note 1)January 6,
2025

1,550

Floating
interest rates(Note 2)January 6,
2023

880

Floating
interest rates(Note 3)January 6,
2021

January 6,
2020

Total Debt
(Note 1)
(Note 2)
(Note 3)
(b)

6,980

Borrowing
MethodUnsecured/ nonguarantee-

1-month JPY TIBOR (Base Rate) + spread (0.50000%), fixed, in effect, at 0.64291% by the interest swap
agreement
1-month JPY TIBOR (Base Rate) + spread (0.30000%), fixed, in effect, at 0.41687% by the interest swap
agreement
1-month JPY TIBOR (Base Rate) + spread (0.20000%)

Acquisition of Assets

The Asset Manager decided to acquire two hotels as follows on December 9, 2019, and acquisition of assets wascompleted on January 6, 2020.

Property
Number

Property Name

Acquisition Price(million yen)Appraisal Value(million yen)
(Note 1)

D82

Hotel MyStays Premier Narita

10,593

10,700Adria Tokutei Mokuteki
KaishaD83

Art Hotel Morioka

5,643

5,700

Heijo Tokutei Mokuteki
Kaisha16,236

16,400-Total(Note 1)(c)SellerAppraisal Value is based on appraisal value stated in the appraisal report by The Tanizawa Sōgō Appraisal
Co., Ltd. or JLL Morii Valuation & Advisory K.K. on the valuation date of October 1, 2019.

Sale of Assets

The Asset Manager decided to sell one residential property as follows on December 9, 2019, and sale of asset wascompleted on January 15, 2020.

- 29 -

Property
Number

Property Name

A51

City House Tokyo
Shinbashi(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)Acquisition
Price(JPY million)

Book Value
Sale Price(JPY million) (JPY million)(Note 1)
(Note 2)

2,520

2,269

4,465

Estimated
Gain on Sale
(JPY million)(Note 3)

Transferee

2,043

Undisclosed(Note 4)

Book Value shows a figure as of December 31, 2019.
Sale Price does not include transfer related cost, adjustments for fixed asset taxes or city planning taxes, or
national or local consumption taxes.
Estimated Gain on Sale is calculated by deducting the Book Value and estimated transfer related cost from
Sale Price.
The name of the transferee is not disclosed, as the transferee’s consent has not been obtained for disclosure.
Amounts are rounded down to the nearest million yen.

- 30 -

Overview of the Investment Corporation
1

Overview of Investment
By Period
Results Dates
Number of issuable
investment units(Unit)
Number ofinvestment units
issued andoutstanding(Unit)
Unitholders’ capital(JPY million)
Number of total
unitholders

229th fiscal
periodAs of Dec. 31,
2017

30th fiscal
periodAs of Jun. 30,
2018

31st fiscal
periodAs of Dec. 31,
2018

32nd fiscal
periodAs of Jun. 30,
201933rd fiscal
periodAs of Dec. 31,
2019

10,000,000

10,000,000

10,000,000

10,000,000

10,000,000

4,793,181

4,793,181

5,666,840

5,666,840

6,096,840

168,798

168,798

211,092

211,092

235,701

26,761

27,96035,22832,64534,626

Notes regarding Unitholders
Major unitholders at the end of the Reporting Period are as below.

Name

Number of units held

% of total number of investment
units issued and outstanding

1,172,717

19.23

669,210

10.97

299,486

4.91

281,403

4.61

191,295

3.13

123,2452.02

118,042

1.93

103,325

1.69

80,364

1.31

77,534

1.27

3,116,621

51.11

The Master Trust Bank of Japan, Ltd. (trust
account)
Japan Trustee Services Bank, Ltd. (trust account)
JP MORGAN BANK LUXEMBOURG S.A.
384500
The Nomura Trust and Banking Co., Ltd.
(investment trust account)
Trust & Custody Services Bank, Ltd. (securities
investment trust account)
GCAS BANA LONDON US CLIENT
Mizuho Trust & Banking Co., Ltd.
STATE STREET BANK AND TRUST COMPANY
505001
STATE STREET BANK WEST CLIENT TREATY 505234
J.P. Morgan Securities
Total(Note)

Percentages are rounded down to two decimal places.

- 31 -

3

Notes regarding Directors
Directors at the end of the Reporting Period are listed below.

Position

Executive Director

Name

Naoki Fukuda

Hiroyuki Fujimoto
Supervisory Director
Yoshihiro Tamura

Auditor(Note)

Concurrent responsibilities
President and CEO,
Consonant Investment
Management Co., Ltd.
(current position)
Tax accountant,
CPA Fujimoto OfficeOutside Auditor,
BRYCEN Co., Ltd.
(current position)
Attorney,
Shiba-Daimon Law Office
Statutory Auditor,
BEQONE PARTNERS, Inc.
(current position)

Ernst & Young
ShinNihon LLC-

Directors’ remunerationfor operating period(JPY thousand)
-

2,400

2,400

37,800Executive and supervisory directors do not hold INV’s units either in their names or in the names of third
parties.
In addition, while they may be directors of organizations not listed above, those organizations aswell as those listed above have no conflicts of interest with INV.

Determination policy for dismissal or non-reappointment of Auditor
The auditing agreement with the auditor is renewed every accounting period. Dismissals are made in accordance with theInvestment Trust Act, and in addition, non-reappointments are considered by the board of directors of INV by comprehensively
taking into account the auditing quality, auditor remuneration, and other various circumstances.

- 32 -

4

Asset Management Company, Asset Custody Companies, and General Administrative AgentsThe asset management company, asset custody companies, and general administrative agents at the end of the Reporting
Period are as below.

Delegation category
Asset management company
Asset custody company
General administrative agent (institutional operations(Note 1) administration of unitholders’ registry, etc.)
General administrative agent(institutional operations (Note 2))
General administrative agent(accounting operations, etc.)
Special account management company
General administrative agent(Fiscal agent pertaining to investment corporation
bonds, etc.)(Note 1)
(Note 2)

(Note 3)(Note 4)

Name
Consonant Investment Management Co., Ltd.
Sumitomo Mitsui Trust Bank, Limited
Sumitomo Mitsui Trust Bank, Limited
Consonant Investment Management Co., Ltd.
Sumitomo Mitsui Trust Bank, Limited
Mitsubishi UFJ Trust and Banking Corporation
Limited (Note 3) / Sumitomo Mitsui Trust
Bank, Limited (Note 4)
Mizuho Bank, Ltd. / Sumitomo Mitsui
Banking Corporation

Of the administrative tasks for the INV’s institutional operations, tasks related to the mailing of generalunitholders’ meetings and the receipt and counting of voting forms are delegated.
(i) Tasks related to the running of general unitholders’ meetings for INV (excluding tasks related to the mailingof general unitholders’ meetings and the receipt and counting of voting forms), (ii) tasks related to the runningof the meetings of the Board of Directors of INV, and (iii) or tasks incidental or related to that mentioned in(i) or (ii) are delegated.
Conducts administrative tasks related to the creation, maintenance, and disposition of transfer savings accountregisters for special accounts of unitholders of the INV before the merger (former Tokyo Growth REIT
Investment Inc.) as well as tasks related to other transfer savings account registers.
Conducts administrative tasks related to the creation, maintenance, and disposition of transfer savings accountregisters for special accounts of unitholders of the former LCP as well as tasks related to other transfer savings
account registers.

- 33 -

Status of Investment Corporation’s Assets under Management
1

Composition of INV’s Assets
Fiscal period ended June 30, 2019(as of June 30, 2019)

Type ofasset

Geographic area

Purpose(Note 1)

Percentage of
total assets(%)

Amount held
(JPY million)(Note 2)

Greater Tokyo
Area (Note 3)
Major regional
citiesOverseas (Note 4)
Subtotal

Fiscal period ended December 31, 2019(as of December 31, 2019)
Percentage of
total assets(%)

Amount held
(JPY million)(Note 2)

2

0.0

3

0.0

-

-

-

-

35,8377.7

35,442

6.8

35,8397.7

35,4456.8

35,8597.7

35,839

7.7

Greater Tokyo area
Major regional
citiesSubtotal

41,5758.9

38,366

7.3

15,346

3.3

15,186

2.9

56,921

12.2

53,552

10.3

Greater Tokyo area
Real
Offices/Commercial Major regional
estate in
Facilities
citiestrust
Subtotal

-

-

-

-

4,825

1.0

4,789

0.9

4,825

1.0

4,789

0.9

158,74533.9

161,20230.9

131,97028.2

210,59240.3

290,71562.1

371,79471.2

Real
estateHotelsTotal real estate

Residences

HotelsGreater Tokyo area
Major regional
citiesSubtotal

Total real estate in trust

352,46275.3

430,137

82.3

Preferred equity interest (Note 5)

17,856

3.8

17,856

3.4

Deposits and other assets

61,77213.2

38,992

7.5

467,931100.0

522,431100.0(388,302)(83.0)(465,583)(89.1)

Total assets (Note 6)(Note 1) “Greater Tokyo area” refers to Tokyo, Kanagawa, Chiba and Saitama.
(Note 2) “Amount held” is from the balance sheet as of the end of the reporting period (book value after depreciation for realestate, leasehold and real estate in trust). The amounts held for hotels are calculated by including book value ofaccompanying FF&E, in principle.
(Note 3) While Hotel MyStays Haneda is held as trust beneficiary interests, part of accompanying FF&E is held in kind, whichfalls under this category.
(Note 4) The Leasehold of the Cayman Hotels falls under the category of “Real estate” for “Overseas.” The leasehold interests
are the rights equivalent to long-term real estate leasehold rights for buildings and land under the laws of the Cayman
Islands (Term: 99 years; annual lease payment: USD 1 or KYD 1). INV implemented an investment structure change
regarding “Westin Grand Cayman Seven Mile Beach Resort & Spa” and “Sunshine Suites Resort” on May 9, 2019
(Cayman Island local time), a change from making investments based on the TK agreement to directly owning theLeasehold of the Cayman Hotels, which are the undying assets of the TK interest.
(Note 5) Preferred equity interest issued by Kingdom Special Purpose Company, with the Sheraton Grande Tokyo Bay Hotel as
an underlying asset (asset in trust of trust beneficiary interest acquired by Kingdom Special Purpose Company, which is
the real estate that serves as the main source of revenue for Kingdom Special Purpose Company).
(Note 6) The figures indicated in parenthesis under “Total assets” show the amounts related to owned real estate (excluding theamount of preferred equity securities and TK interest owned).

- 34 -

2

Major Properties
The overview of INV’s major properties (top 10 properties by book value) (Note 1) at the end of the Reporting Period is
as below.

Name of property

D200

Westin Grand Cayman Seven Mile Beach
Resort & Spa

Book value

Leasable area

(JPY million)(m2)

Leased area

Occupancy rate

Ratio of

(m2)

(%)

rental revenue(Note 2)

(Note 3)(%) (Note 4)Main use

29,701

21,528.23

21,528.23

100.0

―

Hotel

D43

Hotel MyStays Gotanda Station

26,392

10,137.88

10,137.88

100.0

3.1

Hotel

D60

Hotel MyStays Premier Akasaka

20,5428,620.69

8,620.69

100.0

3.0

Hotel

D44

Hotel Epinard Nasu

19,58537,702.33

37,702.33

100.0

7.8

Hotel

D61

Hotel MyStays Premier Sapporo Park

16,486

21,670.64

21,670.64

100.0

3.1

Hotel

D64

Hotel MyStays Sapporo Aspen

15,517

15,313.17

15,313.17

100.0

3.0

Hotel

D47

Hotel MyStays Premier Kanazawa

13,023

13,250.03

13,250.03

100.0

2.1

Hotel

12,952

13,026.99

13,026.99

100.0

2.1

Hotel

D50

Hotel MyStays Shin Osaka ConferenceCenter

D65

Art Hotel Ishigakijima

9,706

17,247.54

17,247.54

100.0

2.3

Hotel

D51

Hotel MyStays Premier Omori

9,699

11,849.61

11,849.61

100.0

1.8

Hotel

173,609170,347.11

170,347.11

100.0

28.2

Total

(Note 1) Securities described in “6 Asset Portfolio of Securities” later in this document are excluded.
(Note 2) Leasable area of Westin Grand Cayman Seven Mile Beach Resort & Spa indicates the area subject to management
contract.
(Note 3) “Occupancy rate” is computed by dividing the leased area by leasable area, rounded to one decimal place.
(Note 4) “Ratio of rental revenue” are rounded to one decimal place. For Westin Grand Cayman Seven Mile Beach Resort &Spa, management contract revenue of JPY 1,198,474 thousand is recorded, but not included in the calculation of ratio ofrental revenue.

- 35 -

3

Asset Portfolio of Real Estate, etc.
The portfolio of the properties (real estate and trust beneficiary interest in real estate) held by INV at the end of theReporting Period is as below.

Name of property

Location(Note 1)

Legal form of Leasable area
asset(m2) (Note 2)

A26

Nisshin Palacestage
Daitabashi

1-31-2 Izumi, Suginami-ku, Tokyo

A27

Nisshin Palacestage HigashiNagasaki

5-4-1 Nagasaki, Toshima-ku, Tokyo

A28

Growth Maison Gotanda

2-26-6 Nishi-Gotanda, Shinagawa-ku,
Tokyo

A29

Growth Maison Kameido

6-58-16 Kameido, Koto-ku, Tokyo

A30

Emerald House

3-27-18 Itabashi, Itabashi-ku, Tokyo

A32

Suncrest Shakujii-Koen

3-15-35 Takanodai, Nerima-ku, Tokyo

A33

Growth Maison ShinYokohama

3-16-2 Shin-Yokohama, Kohoku-ku,
Yokohama-shi, Kanagawa

A34

Belle Face UenoOkachimachi

1-27-5 Higashi-Ueno, Taito-ku, Tokyo

A35

Grand Rire Kameido

3-39-12 Kameido, Koto-ku, Tokyo

A37

Growth Maison Yoga

1-15-15 Okamoto, Setagaya-ku, Tokyo

A38

Route Tachikawa

3-7-6 Nishikicho, Tachikawa-shi,
Tokyo

A39

Shibuya-Honmachi Mansion

2-35-2 Honmachi, Shibuya-ku, Tokyo

A40

City Heights Kinuta

4-13-15 Kinuta, Setagaya-ku, Tokyo

A41

Acseeds Tower
Kawaguchi- Namiki

2-5-13 Namiki, Kawaguchi-shi,
Saitama

A43

College Square Machida

3-4-4 Nakamachi, Machida-shi, Tokyo

A44

Belair Meguro

1-2-15 Meguro, Meguro-ku, Tokyo- 36 -

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Appraisal value
as of December Book value
31, 2019(JPY(JPY million)
million)(Note 3)

1,771.13

1,230

1,097

2,681.94

1,340

1,055

1,051.50

1,030

839

1,367.96

1,160

954

2,152.31

1,430

1,329

3,029.16

1,110

1,060

1,858.44

1,180

937

1,351.11

1,090

925

1,562.26

1,010

797

1,015.34

775

729

1,368.57

674

636

1,167.50

666

698

1,235.93535

649

1,210.74761

522

1,047.75

540

561

557.05627

549

Name of property

Location(Note 1)

Legal form of Leasable area
asset(m2) (Note 2)

A45

Wacore Tsunashima I

2-7-47 Tarumachi, Kohoku-ku,
Yokohama-shi, Kanagawa

A46

Foros Nakamurabashi

1-6-6 Kouyama, Nerima-ku, Tokyo

A47

Growth Maison Kaijin

5-29-51 Kaijin, Funabashi-shi, Chiba

A48

College Square Machiya

7-3-1 Arakawa, Arakawa-ku, Tokyo

A51

City House Tokyo Shinbashi(Note 5)

6-19-1 Shinbashi, Minato-ku, Tokyo

A53

Nishiwaseda Cresent
Mansion3-18-9 Nishi-Waseda, Shinjuku-ku, Tokyo

A54

Lexington Square
Akebonobashi

3-8 Yochomachi, Shinjuku-ku, Tokyo

A59

Towa City Coop
Shinotsuka II

5-49-7 Higashi-Ikebukuro, Toshima-ku,
Tokyo

A61

Bichsel Musashiseki

1-22-7 Sekimachi-Kita, Nerima-ku,
Tokyo

A63

Towa City Coop Sengencho

4-338-2 Sengencho, Nishi-ku,
Yokohama-shi, Kanagawa

A64Royal Park Omachi

2-11-10 Omachi, Aoba-ku, Sendai-shi,
Miyagi

A65

Lexington Square
Haginomachi

1-15-16 Haginomachi, Miyagino-ku,
Sendai-shi, Miyagi

A66

Visconti Kakuozan

2-44 Otanacho, Chikusa-ku, Nagoya-shi,
Aichi

A71

Lexington Square Daitabashi

1-33-18 Izumi, Suginami-ku, Tokyo

A72

Lexington Square
Honjo Azumabashi

4-20-6 Higashi-Komagata, Sumida-ku,
Tokyo

A73

AMS TOWER Minami 6-Jo

2-5-15 Minami 6-Jo Nishi, Chuo-ku,
Sapporo-shi, Hokkaido

A76

Neo Prominence

3-21-5 Shimo, Kita-ku, Tokyo

A77

Invoice Shin-Kobe
Residence

3-3-8 Ikutacho, Chuo-ku, Kobe-shi,
Hyogo

A78

Cosmo Court Motomachi

3-12-20 Motomachidori, Chuo-ku, Kobeshi, Hyogo

A79

Revest Honjin

2-13 Toriidori, Nakamura-ku, Nagoyashi, Aichi

A80

Revest Matsubara

3-13-12 Matsubara, Naka-ku, Nagoyashi, Aichi- 37 -

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Appraisal value
as of December Book value
31, 2019(JPY(JPY million)
million)(Note 3)907.46524

514

815.77585

505

2,040.27

514

509

871.35557

441

3,364.00

3,650

2,269

4,310.77

2,780

1,889

1,987.88

1,970

1,294

1,627.13

1,250

805

1,220.24

828

554

3,426.36

1,440

1,006

1,929.59

663

386

1,528.58417

274

705.75286

230

1,430.64

1,260

825

784.74653

424

4,460.56

1,260

911

3,574.70

2,250

1,597

2,773.71

1,470

1,134

2,310.49

1,130

864

1,933.80

845

592

1,955.40

841

583

Name of property

Location(Note 1)

Legal form of Leasable area
asset(m2) (Note 2)

A82

Alba Noritake Shinmachi

3-6-8 Noritake Shinmachi, Nishi-ku,
Nagoya-shi, Aichi

A83

Revest Meieki Minami

2-13-33 Meieki-Minami, Nakamura-ku,
Nagoya-shi, Aichi

A84

Revest Heian

2-13-17 Heian, Kita-ku, Nagoya-shi,
Aichi

A85

Vendir Hamaotsu Ekimae

1-2-15 Hamaotsu, Otsu-shi, Shiga

A86

Salvo Sala

2-6-21 Shimanouchi, Chuo-ku, Osakashi, Osaka

A87

Excellente Kagurazaka

128-1 Yamabukicho, Shinjuku-ku, Tokyo,
and other one parcel

A88

Luna Court Edobori

3-4-11 Edobori, Nishi-ku, Osaka-shi,
Osaka

A89

Winntage Kobe Motomachi

7-2-2 Motomachidori, Chuo-ku, Kobeshi, Hyogo

A90

Queen's Court Fukuzumi

1-3-10 Fukuzumi, Koto-ku, Tokyo

A91

Corp Higashinotoin

380-1 Kawaranomachi,
Higashinotoindori Nijo Kudaru,
Nakagyo-ku, Kyoto-shi, Kyoto, and othertwo parcels

A92

Belair Oimachi

5-14-17 Higashi-Oi, Shinagawa-ku,
Tokyo

A93

Siete Minami-Tsukaguchi

3-18 Minami-Tsukaguchimachi,
Amagasaki-shi, Hyogo

A94

Prime Life Sannomiya
Isogami Koen

4-3-23 Isogamidori, Chuo-ku, Kobe-shi,
Hyogo

A95

HERMITAGE NANBA
WEST

4-10-3 Sakuragawa, Naniwa-ku, Osakashi, Osaka

A96

Century Park Shinkawa 1bankan

4-1-2 Shinkawacho, Minato-ku, Nagoyashi, Aichi

A97

West Avenue

1-5-17 Nishi, Kunitachi-shi, Tokyo

A98

Little River Honmachibashi

1-34 Honmachibashi, Chuo-ku, Osakashi, Osaka

A99

Prime Life Mikage

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

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- 38 -

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Appraisal value
as of December Book value
31, 2019(JPY(JPY million)
million)(Note 3)

1,731.68

775

533

1,634.60

810

523

1,554.03746

525

2,670.66

784

504

1,428.12

677

485

701.92690

498

1,185.50606

468

1,433.35

637

451

765.18681

424

1,029.05

539

403

530.60569

383

1,020.86

464

342

789.12477

335

992.76467

319

1,477.62

466

311

794.80337

309

974.81415

282

761.18345

268

5,230.18

2,140

1,708

2,940.20

1,990

1,654

2,048.28

1,920

1,600

8,776.26

3,240

2,742

Location(Note 1)Name of property

Legal form of Leasable area
asset(m2) (Note 2)

A104

Royal Parks Shinden

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

A106

Royal Parks Seasir MinamiSenju

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

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B17

Lexington Plaza Hachiman

3-1-50 Hachiman, Aoba-ku, Sendaishi, Miyagi

B18

AEON TOWN Sukagawa

105 Furukawa, Sukagawa-shi,
Fukushima

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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, Shimogyoku, Kyoto-shi, Kyoto

D04

MyStays Shin-Urayasu
Conference Center

2-1-4 Akemi, Urayasu-shi, Chiba

D05

Hotel MyStays Maihama

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

D06

Hotel MyStays Premier
Dojima2-4-1 Sonezakishinchi, Kita-ku,
Osaka-shi, Osaka

D07

Hotel MyStays NagoyaSakae

2-23-22 Higashi-Sakura, Naka-ku,
Nagoya-shi, Aichi

D08

Hotel MyStays SakaisujiHonmachi

1-4-8 Awaji-machi, Chuo-ku, Osakashi, Osaka

D09

Hotel MyStays Yokohama

4-81 Sueyoshicho, Naka-ku,
Yokohama-shi, Kanagawa

D10

Hotel MyStays Nippori

5-43-7 Higashi-Nippori, Arakawa-ku,
Tokyo

D11

Hotel MyStays FukuokaTenjin-Minami

3-14-20 Haruyoshi, Chuo-ku,
Fukuoka-shi, Fukuoka

D12

Flexstay Inn Iidabashi

3-26 Shin-Ogawamachi, Shinjuku-ku,
Tokyo

D13

Hotel MyStays
Ueno Inaricho

1-5-7 Matsugaya, Taito-ku, Tokyo

D14

Flexstay Inn Shinagawa

1-22-19 Kita-Shinagawa, Shinagawaku, Tokyo

D15

Flexstay Inn Tokiwadai

1-52-5 Tokiwadai, Itabashi-ku, Tokyo

D16

Flexstay Inn Sugamo

3-6-16 Sugamo, Toshima-ku, Tokyo- 39 -

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Appraisal value
as of December Book value
31, 2019(JPY(JPY million)
million)(Note 3)

15,797.29

5,830

4,850

6,496.86

2,920

2,661

131,152.79

68,85653,552

8,419.15

3,700

3,022

18,440.58

2,450

1,767

26,859.73

6,150

4,789

2,585.72

5,070

2,945

3,327.38

4,590

2,530

7,241.51

11,7005,828

6,232.30

7,490

4,627

2,456.36

7,010

4,741

9,445.32

7,090

3,738

9,064.71

5,890

2,624

4,188.83

4,980

2,361

7,379.43

4,060

2,338

1,719.29

2,580

1,800

3,412.71

5,900

1,471

2,953.38

2,160

1,352

1,150.76

2,060

1,243

1,134.52

2,040

1,200

2,539.75

2,260

1,204

2,089.86

2,360

1,117

Name of property

Location(Note 1)

Legal form of Leasable area
asset(m2) (Note 2)

D17

Hotel MyStays Otemae

1-3-2 Tokuicho, Chuo-ku, Osaka-shi,
Osaka

D18

Hotel MyStays
Kiyosumi Shirakawa(Note 6)

1-12-16 Tokiwa, Koto-ku, Tokyo

D19

Flexstay Inn Nakanobu P1

4-27-12 Futaba, Shinagawa-ku, Tokyo

D20

Flexstay Inn Nakanobu P2

4-27-8 Futaba, Shinagawa-ku, TokyoD21

APA Hotel
Yokohama-Kannai

3-37-2 Sumiyoshicho, Naka-ku,
Yokohama-shi, Kanagawa

D22

Hotel MyStays
Hakodate-Goryokaku

26-17 Honcho, Hakodate-shi,
Hokkaido

D23

Flexstay Inn Shirogane

5-10-15 Shirokane, Minato-ku, Tokyo

D24

Hotel MyStays Haneda

5-1-13 Haneda, Ota-ku, Tokyo

D25

Hotel MyStays Kameido P1

6-32-1 Kameido, Koto-ku, Tokyo

D26

Hotel MyStays Ueno
Iriyaguchi

5-5-13 Higashi-Ueno, Taito-ku, Tokyo

D27

Hotel MyStays Kameido P2

6-7-8 Kameido, Koto-ku, Tokyo

D28

Hotel MyStays Shimizu

1-23 Masagocho, Shimizu-ku,
Shizuoka-shi, Shizuoka

D29

Super Hotel Shinbashi/
Karasumoriguchi

5-16-4 Shinbashi, Minato-ku, Tokyo

D30

Flexstay Inn Higashi-Jujo

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

D31

Hotel MyStays Utsunomiya

2-4-1 Higashi-Shukugo, Utsunomiyashi, Tochigi

D32

Flexstay Inn KawasakiKaizuka

1-13-2 Kaizuka, Kawasaki-ku,
Kawasaki-shi, Kanagawa

D33

Comfort Hotel Toyama

1-3-2 Takara-machi, Toyama-shi,ToyamaD34

Flexstay Inn KawasakiOgawacho

15-9 Ogawacho, Kawasaki-ku,
Kawasaki-shi, Kanagawa

D35

Flexstay Inn Ekoda

8-6 Sakaecho, Nerima-ku, Tokyo

D36

Super Hotel Tokyo-JR
Tachikawa Kitaguchi

2-21-9 Akebonocho, Tachikawa-shi,
Tokyo

D37

Super Hotel JR Uenoiriyaguchi

7-9-14 Ueno, Taito-ku, Tokyo

D38

Hotel MyStays Shinsaibashi

1-9-30 Nishi-Shinsaibashi, Chuo-ku,
Osaka-shi, Osaka- 40 -

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Appraisal value
as of December Book value
31, 2019(JPY(JPY million)
million)(Note 3)

4,956.66

3,260

1,143

2,673.64

1,560

900

770.56850

565

391.49409

286

6,568.51

9,950

7,681

7,961.26

4,000

2,811

1,754.06

2,420

2,091

5,400.16

8,820

7,301

4,349.67

7,560

5,377

2,247.92

3,850

3,687

2,793.99

5,110

3,584

3,559.81

2,460

2,139

1,403.89

1,940

1,590

1,714.53

1,340

1,275

11,733.23

2,130

1,232

1,190.57

1,170

910

3,305.64

1,160

919

725.60912

883

3,932.93

4,640

4,858

1,832.97

1,270

1,105

1,279.16

1,250

1,083

1,942.01

2,950

3,044

Name of property

Location(Note 1)

Legal form of Leasable area
asset(m2) (Note 2)

D39

Comfort Hotel Kurosaki

3-13-13 Kurosaki, Yahatanishi-ku,
Kitakyusyu-shi, Fukuoka

D40

Comfort Hotel Maebashi

2-18-14 Omotecho, Maebashi-shi,
Gunma

D41

Comfort Hotel TsubameSanjo

2-115 Sugoro, Sanjo-shi, Niigata

D42

Comfort Hotel Kitami

3-4 Ohdori-Nishi, Kitami-shi,
Hokkaido

D43

Hotel MyStays Gotanda
Station (Note 7)

2-6-8 Nishi-Gotanda, Shinagawa-ku,
Tokyo

D44

Hotel Epinard Nasu

1-10 Kaidoue (and 59 other landparcels), Oaza-Takakuhei, Nasumachi, Nasu-gun, Tochigi

D45

Hotel MyStays Fukuoka
Tenjin3-5-7 Tenjin, Chuo-ku, Fukuoka-shi,
Fukuoka

D46

Hotel MyStays
Hamamatsucho

1-18-14 Hamamatsucho, Minato-ku,
Tokyo

D47

Hotel MyStays PremierKanazawa

2-13-1 Hirooka, Kanazawa-shi,Ishikawa

D48

Takamatsu Tokyu REI Hotel

9-9 Hyogomachi, Takamatsu-shi,
KagawaD49

Hotel MyStays Premier
Hamamatsucho

1-8-5 Hamamatsucho, Minato-ku,
Tokyo

D50

Hotel MyStays Shin Osaka
Conference Center

6-2-4 Nishinakashima, Yodogawa-ku,
Osaka-shi, Osaka and two other lots

D51

Hotel MyStays PremierOmori

6-11-2 Minami Oi, Shinagawa-ku,
Tokyo and 13 other lots

D52

Beppu Kamenoi Hotel

2160-1 Chuocho, Beppu-shi, Oita and12 other lots

D53

Hotel MyStays Sapporo
Station4-15 Kita Hachijyo Nishi, Kita-ku,
Sapporo-shi, Hokkaido

D54

Hotel MyStays Yokohama
Kannai

5-65, Onoe-cho, Naka-ku, Yokohamashi, Kanagawa and 3 other lots

D55

Art Hotel Joetsu

5-1-11, Hon-cho Joetsu-shi, Niigata

D56

Art Hotel Hirosaki City

1-1-2, 1-6, 1-7, 2-1, Omachi, Hirosakishi, Aomori

D57

Hotel MyStays Oita

1-32, Niagemachi Oita-shi, Oita

D58

Hotel MyStays Gotanda

2-5-4, Higashigotanda Shinagawa-ku,
Tokyo

D59

Hotel MyStays Tachikawa

1-8-14, Nishiki-cho Tachikawa-shi,
Tokyo

D60

Hotel MyStays Premier
Akasaka

2-17-54, Akasaka Minato-ku, Tokyo- 41 -

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Appraisal value
as of December Book value
31, 2019(JPY(JPY million)
million)(Note 3)3,207.60

1,250

1,064

3,660.96

1,160

1,034

3,099.90

1,100

945

3,009.50

926

788

10,137.88

25,80026,39237,702.33

23,50019,5855,083.06

8,710

7,792

1,951.90

6,890

7,793

13,250.03

14,20013,023

7,148.17

2,270

2,122

6,151.93

10,700

8,005

13,026.99

13,50012,952

11,849.61

10,2009,699

19,422.08

9,180

8,280

7,267.88

8,430

7,715

4,501.18

5,540

5,235

7,563.60

2,810

2,728

14,826.30

2,770

2,644

3,254.69

1,640

1,550

1,839.77

4,140

4,067

3,844.64

3,380

3,232

8,620.69

23,90020,542Name of property

Location(Note 1)

D61

Hotel MyStays Premier
Sapporo Park

2-2-10, Minamikujo Nishi, Chuo-ku,
Sapporo-shi, Hokkaido

D62

Hotel MyStays Ueno East

5-5-6, Higashi Ueno, Taito-ku, Tokyo

D63

Hotel MyStays Midosuji
Honmachi

3-2-10, Honmachi, Chuo-ku, Osakashi, Osaka

D64

Hotel MyStays
Aspen

5-1 Nishi 4-chome, Kita 8-jo, Kita-ku,
Sapporo-shi, Hokkaido, and sevenother lots

D65

Art Hotel Ishigakijima554-2 Nishimaji Okawa, Ishigaki-shi,
Okinawa, and four other lots

D66

Hotel MyStays Fuji Onsen
Resort2654 Arakura Deguchi, Fujiyoshidashi, Yamanashi, and 15 other lots

D67

Hotel Sonia Otaru

1-4-20 Ironai, Otaru-shi, Hokkaido

D68

Hotel MyStays Kanazawa
Castle10-17 Konohana-machi, Kanazawashi, Ishikawa

D69

Art Hotel Niigata Station

1-1 Sasaguchi, Chuo-ku, Niigata-shi,
Niigata

D70

Hotel MyStays
Nishiki

3-8-21 Nishiki, Naka-ku, Nagoya-shi,
Aichi

D71

Hotel Nord Otaru

1-4-16 Ironai, Otaru-shi, Hokkaido

D72

Hotel MyStays Kagoshima
Tenmonkan

2-7 Yamanokuchi-cho, Kagoshima-shi,
Kagoshima

D73

Art Hotel Asahikawa

6-29-2 7-jo-dori, Asahikawa-shi,
Hokkaido

D74

Hotel MyStays Matsuyama

1-10-10 Otemachi, Matsuyama-shi,
Ehime

D75

Hotel MyStays
Susukino

Sapporo

1-6 Nishi 5-Chome, Minami 7-jo,
Chuo-ku, Sapporo-shi, Hokkaido, andone other lot

D76

Hotel MyStays
Nakajima Park

Sapporo1-20 Nishi 1-chome, Minami 14-jo,
Chuo-ku, Sapporo-shi, Hokkaido

D77

Hotel MyStays Sapporo
Nakajima Park Annex

4-3 Nishi 1-chome, Minami 11-jo,
Chuo-ku, Sapporo-shi, Hokkaido

D78

Flexstay Inn Sakuragicho

2-72-2 Hanasaki-cho, Naka-ku,
Yokohama-shi, Kanagawa, and fourother lot

D79

MyCUBE by MYSTAYS
Asakusa Kuramae

2-6-7 Kuramae, Taito-ku, Tokyo

D80

Hotel MyStays Kagoshima
Tenmonkan Annex

1-20 Gofuku-machi, Kagoshima-shi,
Kagoshima

D81

Hotel MyStays Nayoro

11 Minami 5-chome, Nishi 3-jo,
Nayoro-shi, Hokkaido, and one other
lot

Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest

D200

Westin Grand Cayman
Seven Mile Beach Resort &Spa

30620 Seven Mile Beach Road, Grand
Cayman, Cayman Islands

The
Leasehold

SapporoNagoyaLegal form of Leasable area
asset(m2) (Note 2)- 42 -

Appraisal value
as of December Book value
31, 2019(JPY(JPY million)
million)(Note 3)

21,670.64

17,100

16,486

4,396.02

5,390

5,236

3,429.43

4,980

4,966

15,313.17

15,70015,517

17,247.54

9,830

9,706

5,498.49

10,1009,323

6,509.41

5,990

5,889

5,931.84

5,740

5,679

10,403.01

5,590

5,480

6,077.99

5,260

5,185

6,047.43

4,340

4,279

7,659.55

3,540

3,436

25,131.84

3,250

3,165

8,274.37

3,190

3,068

2,853.26

3,090

3,053

5,473.41

2,140

2,113

1,775.21

1,600

1,579

1,308.61

1,470

1,424

2,156.70

1,350

1,289

2,047.70

1,210

1,167

1,985.27969

950

21,528.23

35,585(USD
324,800,000)(Note 5)29,701

Location(Note 1)Name of property

D201

Sunshine Suites Resort

Legal form of Leasable area
asset(m2) (Note 2)1465 Esterley Tibbetts Highway,
Grand Cayman, Cayman Islands

The
Leasehold6,723.11

Appraisal value
as of December Book value
31, 2019(JPY(JPY million)
million)(Note 3)
6,431
(USD
5,740
58,700,000)(Note 5)

Subtotal

519,273.01

482,093407,240

Total

677,285.53

557,099

465,583(Note 1) “Location” is, in principle, based on the indicated address (jyukyohyoji), except that if the jyukyohyoji system has notbeen implemented for such property, the location is based on the land number (chiban).
(Note 2) Leasable areas of Westin Grand Cayman Seven Mile Beach Resort & Spa and Sunshine Suites Resort indicate the areas
subject to management contract.
(Note 3) “Appraisal value as of December 31, 2019” is the value appraised or researched by Asset Research and Development
Inc., Japan Real Estate Institute, JLL Morii Valuation & Advisory K.K., The Tanizawa Sogo Appraisal Co., Ltd., Daiwa
Real Estate Appraisal Co., Ltd. or CBRE, Inc., in accordance with the Articles of Incorporation of INV and the regulationsof The Investment Trusts Association, Japan.
(Note 4) Individual trust beneficiary interests were integrated into three groups with other trust beneficiary interests when INV
procured funds through debt financing backed by trust assets in July 2011. As a result of disposition of assets anddetachment of trust beneficiary interest from an integrated trust account thereafter, the grouping of trust beneficiaryinterests at the end of the Reporting Period 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, and Foros Nakamurabashi.
Group 2
College Square Machida, Belair Meguro, and Wacore Tsunashima I.
Group 3
Suncrest Shakujii-Koen, Grand Rire Kameido, Acseeds Tower Kawaguchi-Namiki, Growth Maison Kaijin, andCollege Square Machiya.
(Note 5)The trust beneficiary interest of City House Tokyo Shinbashi was sold on January 15, 2020.

(Note 6)

The property name was changed to Hotel MyStays Kiyosumi Shirakawa on September 9, 2019 along with the changeof the hotel name.

(Note 7)

“Appraisal value as of December 31, 2019” indicates appraisal value calculated deeming the owned portion and thefloor expansion portion as one.

(Note 8)“Appraisal value as of December 31, 2019” is converted into JPY using the exchange rate of USD 1 = JPY 109.56,
which is the exchange rate on the closing date of the fiscal period (December 31, 2019).

- 43 -

Trends for the leasing operations of the properties owned by INV are as below.

Name of property

32nd fiscal period(January 1, 2019 to June 30, 2019)
Occupancy
RentalNumber ofrate
revenue
Ratio oftenants(at end of(during
rental(at end of
period)period)revenueperiod)
(%)
(JPY
(%)
(unit)(Note 1)
thousand)(Note 3)(Note 3)(Note 2)33rd fiscal period(July 1, 2019 to December 31, 2019)
Occupancy
RentalNumber ofrate
revenue
Ratio oftenants(at end of(during
rental(at end of
period)period)revenueperiod)
(%)
(JPY
(%)
(unit)(Note 1)
thousand)(Note 3)(Note 3)(Note 2)

A26

Nisshin Palacestage
Daitabashi

1

91.0

38,973

0.3

1

96.1

38,1570.3

A27

Nisshin Palacestage
Higashi- Nagasaki

1

91.0

47,365

0.4

1

96.6

46,9060.3

A28

Growth Maison Gotanda

1

100.0

27,670

0.2

1

100.0

27,7040.2

A29

Growth Maison Kameido

1

100.0

35,461

0.3

1

96.9

35,991

0.2

A30

Emerald House

1

99.0

49,784

0.4

1

96.7

42,6500.3

A32

Suncrest Shakujii-Koen

1

97.1

38,919

0.3

1

97.9

38,0480.3

A33

Growth Maison ShinYokohama

1

94.3

37,434

0.3

1

95.6

39,2170.3

A34

Belle Face UenoOkachimachi

1

100.0

35,557

0.3

1

93.9

32,2340.2

A35Grand Rire Kameido

1

100.0

26,619

0.2

1

100.0

26,6630.2

A37Growth Maison Yoga

1

100.0

23,337

0.2

1

97.5

23,636

0.2

A38

Route Tachikawa

1

96.6

21,368

0.2

1

100.0

22,1280.2

A39

Shibuya-Honmachi Mansion

1

100.0

20,825

0.2

1

100.0

21,4930.1

A40City Heights Kinuta

1

94.6

18,121

0.1

1

100.0

19,3170.1

A41

Acseeds Tower KawaguchiNamiki

1

94.7

26,060

0.2

1

96.5

25,642

0.2

A43

College Square Machida

1

100.0

17,484

0.1

1

100.0

17,4840.1

A44

Belair Meguro

1

100.0

16,939

0.1

1

100.0

17,2650.1

A45

Wacore Tsunashima I

1

94.1

19,009

0.2

1

98.0

18,2980.1

A46

Foros Nakamurabashi

1

92.6

18,923

0.2

1

91.3

19,0650.1

A47

Growth Maison Kaijin

1

95.1

22,511

0.2

1

96.7

23,2240.2

A48

College Square Machiya

1

100.0

14,851

0.1

1

100.0

14,9240.1

A51City House Tokyo Shinbashi

1

95.1

96,881

0.8

1

100.0

95,6540.7

A52

Winbell Kagurazaka (Note 4)

1

99.0

110,474

0.9--

101,713

0.7

A53

Nishiwaseda Cresent
Mansion1

95.7

75,040

0.6

1

100.0

74,752

0.5

A54

Lexington Square
Akebonobashi

1

95.6

52,195

0.4

1

96.6

51,876

0.4- 44 -Name of property

32nd fiscal period(January 1, 2019 to June 30, 2019)
Occupancy
RentalNumber ofrate
revenue
Ratio oftenants(at end of(during
rental(at end of
period)period)revenueperiod)
(%)
(JPY
(%)
(unit)(Note 1)
thousand)(Note 3)(Note 3)(Note 2)33rd fiscal period(July 1, 2019 to December 31, 2019)
Occupancy
RentalNumber ofrate
revenue
Ratio oftenants(at end of(during
rental(at end of
period)period)revenueperiod)
(%)
(JPY
(%)
(unit)(Note 1)
thousand)(Note 3)(Note 3)(Note 2)

A59

Towa City Coop Shinotsuka
II

1

98.7

36,784

0.3

1

88.4

36,436

0.3

A61

Bichsel Musashiseki

1

97.1

25,491

0.2

1

100.0

24,1700.2

A63

Towa City Coop Sengencho

1

91.8

58,868

0.5

1

88.4

56,0890.4

A64Royal Park Omachi

1

91.4

24,462

0.2

1

94.4

26,1470.2

A65

Lexington Square
Haginomachi

1

81.9

16,005

0.1

1

84.5

15,4650.1

A66

Visconti Kakuozan

1

63.3

11,096

0.1

1

76.0

8,301

0.1

A71

Lexington Square Daitabashi

1

95.8

32,823

0.3

1

86.6

32,216

0.2

A72

Lexington Square Honjo
Azumabashi

1

100.0

18,813

0.2

1

100.0

19,0700.1

A73

AMS TOWER Minami 6-Jo

1

84.3

42,868

0.4

1

93.9

45,1360.3

A75

Spacia Ebisu--

199,141

1.6

-

-

-

-

A76

Neo Prominence

1

100.0

67,409

0.6

1

98.4

67,5200.5

A77

Invoice Shin-Kobe Residence

1

97.7

48,726

0.4

1

94.4

49,0070.3

A78

Cosmo Court Motomachi

1

98.7

38,756

0.3

1

98.9

39,0500.3

A79

Revest Honjin

1

92.5

31,055

0.3

1

91.3

29,7900.2

A80

Revest Matsubara

1

93.1

28,945

0.2

1

82.4

27,7600.2

A82

Alba Noritake Shinmachi

1

96.5

26,789

0.2

1

91.6

26,394

0.2

A83

Revest Meieki Minami

1

88.4

26,391

0.2

1

90.5

26,5350.2

A84

Revest Heian

1

92.0

23,830

0.2

1

92.0

22,4400.2

A85

Vendir Hamaotsu Ekimae

1

98.8

33,716

0.3

1

93.4

34,0430.2

A86

Salvo Sala

1

93.7

25,045

0.2

1

83.3

24,1370.2

A87

Excellente Kagurazaka

1

100.0

19,634

0.2

1

100.0

20,1180.1

A88

Luna Court Edobori

1

100.0

21,425

0.2

1

91.9

20,1970.1

A89

Winntage Kobe Motomachi

1

93.0

21,653

0.2

1

96.7

22,4050.2

A90

Queen's Court Fukuzumi

1

95.9

18,464

0.2

1

96.6

17,730

0.1

A91

Corp Higashinotoin

1

97.6

19,084

0.2

1

95.1

18,8390.1

A92

Belair Oimachi

1

96.1

16,659

0.1

1

100.0

15,8240.1

A93

Siete Minami-Tsukaguchi

1

100.0

17,693

0.1

1

100.0

17,7120.1- 45 -Name of property

32nd fiscal period(January 1, 2019 to June 30, 2019)
Occupancy
RentalNumber ofrate
revenue
Ratio oftenants(at end of(during
rental(at end of
period)period)revenueperiod)
(%)
(JPY
(%)
(unit)(Note 1)
thousand)(Note 3)(Note 3)(Note 2)33rd fiscal period(July 1, 2019 to December 31, 2019)
Occupancy
RentalNumber ofrate
revenue
Ratio oftenants(at end of(during
rental(at end of
period)period)revenueperiod)
(%)
(JPY
(%)
(unit)(Note 1)
thousand)(Note 3)(Note 3)(Note 2)

A94

Prime Life Sannomiya
Isogami Koen

1

100.0

15,001

0.1

1

100.0

15,254

0.1

A95

HERMITAGE NANBA
WEST

1

100.0

16,404

0.1

1

100.0

16,4630.1

A96

Century Park Shinkawa 1bankan

1

93.2

19,213

0.2

1

90.9

17,0590.1

A97West Avenue

1

90.0

11,893

0.1

1

95.0

12,2240.1

A98

Little River Honmachibashi

1

100.0

15,315

0.1

1

100.0

14,4150.1

A99

Prime Life Mikage

1

96.7

12,456

0.1

1

100.0

12,411

0.1

A100 City Court Kitaichijo

1

94.9

67,495

0.6

1

95.8

66,7700.5

A101 Lieto Court Mukojima

1

100.0

57,084

0.5

1

99.0

57,225

0.4

A102 Lieto Court Nishi-Ojima

1

99.0

49,890

0.4

1

99.0

49,213

0.3

A103 Royal Parks Momozaka

1

97.6

158,673

1.3

1

97.8

162,427

1.1

A104 Royal Parks Shinden

1

100.0

216,544

1.8

1

100.0

216,838

1.5

A105Royal Parks Tower
Minami-Senju--

716,057

5.9

-

-

-

-

A106

Royal Parks Seasir MinamiSenju

1

97.1

116,981

1.0

1

96.1

117,105

0.8

62

96.1

3,316,459

27.3

61

96.1

2,374,009

16.3

Subtotal
B17

Lexington Plaza Hachiman

1

100.0

164,897

1.4

1

98.5

165,815

1.1

B18

AEON TOWN Sukagawa

1

100.0

141,782

1.2

1

100.0

141,782

1.0

Subtotal

2

100.0

306,680

2.5

2

99.5

307,598

2.1

D01

Hotel MyStays Kanda

1

100.0

106,282

0.9

1

100.0

95,4080.7

D02

Hotel MyStays Asakusa

1

100.0

109,788

0.9

1

100.0

101,299

0.7

D03

Hotel MyStays Kyoto-Shijo

1

100.0

217,841

1.8

1

100.0

173,457

1.2

D04

MyStays Shin-Urayasu
Conference Center

1

100.0

176,876

1.5

1

100.0

190,903

1.3

D05

Hotel MyStays Maihama

1

100.0

146,613

1.2

1

100.0

173,824

1.2

D06

Hotel MyStays Premier
Dojima1

100.0

196,173

1.6

1

100.0

165,027

1.1

D07

Hotel MyStays NagoyaSakae

1

100.0

164,778

1.4

1

100.0

172,065

1.2

D08

Hotel MyStays SakaisujiHonmachi

1

100.0

97,109

0.8

1

100.0

68,8830.5- 46 -Name of property

32nd fiscal period(January 1, 2019 to June 30, 2019)
Occupancy
RentalNumber ofrate
revenue
Ratio oftenants(at end of(during
rental(at end of
period)period)revenueperiod)
(%)
(JPY
(%)
(unit)(Note 1)
thousand)(Note 3)(Note 3)(Note 2)33rd fiscal period(July 1, 2019 to December 31, 2019)
Occupancy
RentalNumber ofrate
revenue
Ratio oftenants(at end of(during
rental(at end of
period)period)revenueperiod)
(%)
(JPY
(%)
(unit)(Note 1)
thousand)(Note 3)(Note 3)(Note 2)

D09

Hotel MyStays Yokohama

1

100.0

103,692

0.9

1

100.0

144,558

1.0

D10

Hotel MyStays Nippori

1

100.0

60,970

0.5

1

100.0

50,7720.3

D11Hotel MyStays FukuokaTenjin-Minami

1

100.0

139,661

1.1

1

100.0

105,772

0.7

D12

Flexstay Inn Iidabashi

1

100.0

53,625

0.4

1

100.0

49,7170.3

D13Hotel MyStays
Ueno Inaricho

1

100.0

48,108

0.4

1

100.0

39,8320.3

D14

Flexstay Inn Shinagawa

1

100.0

44,996

0.4

1

100.0

43,8020.3

D15

Flexstay Inn Tokiwadai

1

100.0

57,894

0.5

1

100.0

50,2670.3

D16

Flexstay Inn Sugamo

1

100.0

59,044

0.5

1

100.0

44,9660.3

D17Hotel MyStays Otemae

1

100.0

76,527

0.6

1

100.0

51,5370.4

D18

Flexstay Inn Kiyosumi
Shirakawa

1

100.0

34,914

0.3

1

100.0

29,7630.2

D19

Flexstay Inn Nakanobu P1

1

100.0

21,654

0.2

1

100.0

18,4050.1

D20

Flexstay Inn Nakanobu P2

1

100.0

10,592

0.1

1

100.0

9,827

0.1

D21

APA Hotel
Yokohama-Kannai

1

100.0

223,810

1.8

1

100.0

230,715

1.6

D22

Hotel MyStays HakodateGoryokaku

1

100.0

119,306

1.0

1

100.0

139,133

1.0

D23

Flexstay Inn Shirogane

1

100.0

56,870

0.5

1

100.0

50,1650.3

D24

Hotel MyStays Haneda

1

100.0

188,750

1.6

1

100.0

181,721

1.2

D25

Hotel MyStays Kameido P1

1

100.0

176,106

1.4

1

100.0

164,644

1.1

D26

Hotel MyStays Ueno
Iriyaguchi

1

100.0

92,250

0.8

1

100.0

82,1360.6

D27

Hotel MyStays Kameido P2

1

100.0

118,396

1.0

1

100.0

112,001

0.8

D28

Hotel MyStays Shimizu

1

100.0

64,662

0.5

1

100.0

62,3440.4

D29Super Hotel
Shinbashi/Karasumoriguchi

1

100.0

39,426

0.3

1

100.0

39,4260.3

D30

Flexstay Inn Higashi-Jujo

1

100.0

39,104

0.3

1

100.0

33,7700.2

D31

Hotel MyStays Utsunomiya

1

100.0

89,549

0.7

1

100.0

104,942

0.7

D32

Flexstay Inn KawasakiKaizuka

1

100.0

30,876

0.3

1

100.0

29,046

0.2

D33

Comfort Hotel Toyama

1

100.0

35,928

0.3

1

100.0

35,9280.2- 47 -Name of property

32nd fiscal period(January 1, 2019 to June 30, 2019)
Occupancy
RentalNumber ofrate
revenue
Ratio oftenants(at end of(during
rental(at end of
period)period)revenueperiod)
(%)
(JPY
(%)
(unit)(Note 1)
thousand)(Note 3)(Note 3)(Note 2)33rd fiscal period(July 1, 2019 to December 31, 2019)
Occupancy
RentalNumber ofrate
revenue
Ratio oftenants(at end of(during
rental(at end of
period)period)revenueperiod)
(%)
(JPY
(%)
(unit)(Note 1)
thousand)(Note 3)(Note 3)(Note 2)

D34

Flexstay Inn KawasakiOgawacho

1

100.0

24,671

0.2

1

100.0

23,2430.2

D35

Flexstay Inn Ekoda

1

100.0

116,844

1.0

1

100.0

110,246

0.8

D36Super Hotel Tokyo-JR
Tachikawa Kitaguchi

1

100.0

31,787

0.3

1

100.0

31,7870.2

D37Super Hotel JR Uenoiriyaguchi

1

100.0

27,275

0.2

1

100.0

27,2750.2

D38

Hotel MyStays Shinsaibashi

1

100.0

61,202

0.5

1

100.0

46,1780.3

D39

Comfort Hotel Kurosaki

1

100.0

37,894

0.3

1

100.0

37,894

0.3

D40

Comfort Hotel Maebashi

2

100.0

43,811

0.4

2

100.0

43,811

0.3

D41

Comfort Hotel TsubameSanjo

2

100.0

34,949

0.3

2

100.0

34,9490.2

D42

Comfort Hotel Kitami

1

100.0

30,300

0.2

1

100.0

30,3000.2

D43

Hotel MyStays Gotanda
Station1

100.0

454,852

3.7

1

100.0

446,108

3.1

D44

Hotel Epinard Nasu

1

100.0

590,306

4.9

1

100.0

1,133,572

7.8

D45

Hotel MyStays Fukuoka
Tenjin1

100.0

204,822

1.7

1

100.0

162,989

1.1

D46

Hotel MyStays
Hamamatsucho

1

100.0

109,531

0.9

1

100.0

106,591

0.7

D47

Hotel MyStays PremierKanazawa

1

100.0

280,864

2.3

1

100.0

300,691

2.1

D48

Takamatsu Tokyu REI Hotel

3

100.0

107,068

0.9

3

100.0

105,3810.7

D49

Hotel MyStays Premier
Hamamatsucho

1

100.0

242,091

2.0

1

100.0

241,981

1.7

D50

Hotel MyStays Shin Osaka
Conference Center

1

100.0

325,410

2.7

1

100.0

302,006

2.1

D51

Hotel MyStays Premier
Omori

1

100.0

279,326

2.3

1

100.0

267,9311.8

D52

Beppu Kamenoi Hotel

1

100.0

416,816

3.4

1

100.0

422,105

2.9

D53

Hotel MyStays Sapporo
Station1

100.0

237,429

2.0

1

100.0

270,530

1.9

D54

Hotel MyStays Yokohama
Kannai1

100.0

136,295

1.1

1

100.0

142,826

1.0

D55

Art Hotel Joetsu

1

100.0

102,515

0.8

1

100.0

128,659

0.9

D56

Art Hotel Hirosaki City

1

100.0

141,110

1.2

1

100.0

138,449

1.0

D57

Hotel MyStays Oita

1

100.0

56,576

0.5

1

100.0

75,2360.5

D58

Hotel MyStays Gotanda

1

100.0

97,585

0.8

1

100.0

94,5230.6- 48 -Name of property

32nd fiscal period(January 1, 2019 to June 30, 2019)
Occupancy
RentalNumber ofrate
revenue
Ratio oftenants(at end of(during
rental(at end of
period)period)revenueperiod)
(%)
(JPY
(%)
(unit)(Note 1)
thousand)(Note 3)(Note 3)(Note 2)33rd fiscal period(July 1, 2019 to December 31, 2019)
Occupancy
RentalNumber ofrate
revenue
Ratio oftenants(at end of(during
rental(at end of
period)period)revenueperiod)
(%)
(JPY
(%)
(unit)(Note 1)
thousand)(Note 3)(Note 3)(Note 2)

D59

Hotel MyStays Tachikawa

1

100.0

89,605

0.7

1

100.0

95,0350.7

D60

Hotel MyStays Premier
Akasaka
Hotel MyStays Premier
Sapporo Park

1

100.0

438,817

3.6

1

100.0

434,197

3.0

1

100.0

384,416

3.2

1

100.0

453,495

3.1

D62

Hotel MyStays Ueno East

1

100.0

143,779

1.2

1

100.0

131,635

0.9

D63

Hotel MyStays Midosuji
HonmachiHotel MyStays Sapporo
Aspen

1

100.0

80,116

0.7

1

100.0

57,242

0.4

-

-

-

-

1

100.0

432,075

3.0

D65

Art Hotel Ishigakijima

-

-

-

-

1

100.0

335,245

2.3

D66

Hotel MyStays Fuji Onsen
Resort

-

-

-

-

1

100.0

332,016

2.3

D67

Hotel Sonia Otaru

-

-

-

-

1

100.0

205,688

1.4

D68

Hotel MyStays Kanazawa
Castle

-

-

-

-

1

100.0

171,802

1.2

D69

Art Hotel Niigata Station

-

-

-

-

1

100.0

261,189

1.8

D70

Hotel MyStays Nagoya
Nishiki

-

-

-

-

1

100.0

139,746

1.0

D71

Hotel Nord Otaru

-

-

-

-

1

100.0

163,764

1.1

D72

Hotel MyStays Kagoshima
Tenmonkan

-

-

-

-

2

100.0

139,722

1.0

D73

Art Hotel Asahikawa

-

-

-

-

1

100.0

251,020

1.7

D74

Hotel MyStays Matsuyama

-

-

-

-

1

100.0

145,755

1.0

Hotel MyStays Sapporo
Susukino
Hotel MyStays Sapporo
Nakajima Park
Hotel MyStays Sapporo
Nakajima Park Annex

-

-

-

-

1

100.0

72,160

0.5

-

-

-

-

1

100.0

67,933

0.5

-

-

-

-

1

100.0

47,431

0.3

Flexstay Inn Sakuragicho

-

-

-

-

1

100.0

43,123

0.3

MyCUBE by MYSTAYS
Asakusa Kuramae
Hotel MyStays Kagoshima
Tenmonkan Annex

-

-

-

-

1

100.0

32,306

0.2

-

-

-

-

1

100.0

43,261

0.3

Hotel MyStays Nayoro

-

-

-

-

1

100.0

37,0180.3

Subtotal

67

100.0

8,530,259

70.2

86

100.0

11,864,218

81.6

Total

131

99.0

12,153,399

100.0

149

99.2

14,545,826

100.0

D61

D64

D75
D76
D77
D78
D79
D80
D81

(Note 1) “Occupancy rate” is calculated by dividing the leased area by leasable area.
(Note 2) “Rental revenue (during period)” indicates leasing operation revenues during the fiscal period for each property andhas been rounded down to the nearest thousand yen.

- 49 -

(Note 3) “Occupancy rate” and “Ratio of rental revenue” are rounded to one decimal place.
(Note 4) The trust beneficiary interest of Winbell Kagurazaka was sold on December 17, 2019.

Name of property

32nd fiscal period
33rd fiscal period(January 1, 2019 to June 30, 2019)(July 1, 2019 to December 31, 2019)
Management
Management
Occupancy
Occupancy
contract
Ratio ofcontract
Ratio of
Number ofrate
Number ofrate
revenue management
revenue management
tenants(at end oftenants(at end of(during
contract(during
contract(at end of
period)(at end of
period)period)revenueperiod)revenueperiod)(%)
period)
(%)
(JPY
(%)
(JPY
(%)
(unit)(Note 1)
(unit)(Note 1)
thousand)(Note 3)thousand)(Note 3)(Note 3)(Note 3)(Note 2)
(Note 2)

D200

Westin Grand Cayman Seven
Mile Beach Resort & Spa

1

100.0

503,692

86.8

1

100.0

1,198,474

85.8

D201

Sunshine Suites Resort

1

100.0

76,895

13.2

1

100.0

199,147

14.2

Total

2

100.0

580,588

100.0

2

100.0

1,397,621

100.0(Note 1) “Occupancy rate” is calculated using the area subject to management contract.
(Note 2) “Management contract revenue” is converted to JPY using the exchange rate at the time of the transaction.
(Note 3) “Occupancy rate” and “Ratio of management contract revenue” are rounded to one decimal place.

- 50 -

4

Asset Portfolio of Facilities Generating Renewable Energy, etc.
Not applicable

5

Asset Portfolio Including Rights to Operate Public Facilities, etc.
Not applicable

6

Asset Portfolio of Securities
The portfolio of the securities held by INV at the end of the Reporting Period is as below.

Name

Type

Preferred equity
securities in
Kingdom Special
Purpose Company

Quantity Book value (JPY million)(units)Unit priceAmountFair value (JPY million) Valuation gainor loss
Unit priceAmount (JPY million)

Notes

Preferred equity 178,458
securities-

17,856-

17,8561)- (Note(Note 2)--

17,856-

17,856-

Total(Note 1) Fair value of the preferred equity securities indicates the acquisition cost.
(Note 2) INV owns 178,458 units of preferred equity securities issued by Kingdom Special Purpose Company (equivalent to49.0% of preferred equity securities issued and outstanding after the issuance of the said preferred equity securities),with the Sheraton Grande Tokyo Bay Hotel as an underlying asset.

7

Status of Contract Amount and Fair Value of Specified Transaction
As of June 30, 2019, the contract amount and fair value of the outstanding transaction under the specified transaction
account of INV are as follows.
(Unit: JPY thousand)Category

Contract amount(Note 1)
Amounts due after
one yearTransaction type, etc.

Fair value(Note 2)

Interest rate swap
95,112,000
66,133,000
64,609Receive floating rate/pay fixed rate
Currency option transaction
3,836,140
622,160
USD/CallNon-market(Option fees)(95,963)(13,687)(24,788)transaction
Currency option transaction
3,836,140
622,160
USD/Put(Option fees)(191,665)(38,743)(89,405)(Note 1) The contract amount, etc. for interest rate swap are stated based on a notional principal.
(Note 2) Estimation method for fair value
Interest rate swap
Estimated based on the price, etc. presented by the correspondent financial institutions.
Currency option
Indicates fair values of option fees, etc. presented by the correspondent financial
institutions.

8

Status of Other Assets
Real estate and trust beneficiary interests in real estate are listed together in “3 Asset Portfolio of Real Estate, etc.” above.
As of the end of this Reporting Period, there are no investments in specified assets that are significant investment targets
for INV outside of 3 and 6 above.

- 51 -

9

Assets Owned Outside of Japan or the Region
Assets owned outside of Japan or the region held by INV at the end of the Reporting Period are as below.

Country nameAmount held
(JPY million)(Note 1)

Appraisal value
as of December 31, 2019 (JPY million) (Note 2)
Percentage of
total assets (%)

No. ofproperties(properties)Japan

447,997

532,928

92.7

145

The Cayman Islands

35,44242,016

7.3

2

Total

483,439

574,945

100.0

147

(Note 1)

(Note 2)

“Amount held” is from the balance sheet (book value after depreciation for real estate and trust beneficiaryinterest in real estate; and book value for preferred equity securities with real estate as underlying assets) as ofDecember 31, 2019.
“Appraisal value as of December 31, 2019” indicates the real estate appraisal value as of December 31, 2019, or
the research value stated in the real estate research report and the appraisal value of investment securities.
“Appraisal value as of December 31, 2019” for preferred equity securities which INV holds in Japan indicatesacquisition cost since their fair value is deemed extremely difficult to value. “Appraisal value as of June 30,
2019” for assets which INV holds in the Cayman Islands indicates the amount converted to JPY using theexchange rate of USD 1 = JPY 109.56, which is the exchange rate on the closing date of the fiscal period(December 31, 2019).

- 52 -

Capital Expenditures for Properties Held by INV

1Schedule for Capital Expenditures
The schedule for the principal capital expenditures for property maintenance construction, etc., as of the end of theReporting Period for the real estate-related assets owned by INV is as follows.
Estimated cost (JPY thousand)Name of property

2

Location

PurposeScheduled time of
implementation

Total

Payment for
the fiscal
Advanceperiod ended
payments
December 31,
2019

D12 Flexstay Inn Iidabashi

Shinjuku-ku,
Tokyo

Conversion of
guestrooms

From January 2020
To June 2020

200,000--

D53

Hotel MyStays
Sapporo Station

Sapporo-shi,
Hokkaido

Renovation work

From January 2020
To June 2020

150,000--

D46

Hotel MyStays
Hamamatsucho

Minato-ku,TokyoRenovation work

From January 2020
To June 2020

134,368--

D45

Hotel MyStays
Fukuoka Tenjin

Fukuoka-shi,
FukuokaRenovation work

From January 2020
To June 2020

121,800--

D44 Hotel Epinard Nasu

Nasu-gun,Tochigi

Renovation work

From January 2020
To June 2020

56,000--Capital Expenditures for the Fiscal Period Ended December 31, 2019
The principal construction work constituting capital expenditures for the real estate assets for the fiscal period ended
December 31, 2019 is as follows. Capital expenditures for the fiscal period totaled JPY 1,138,430 thousand, andtogether with JPY 24,816 thousand in repair costs included in this fiscal period’s expenses, construction work totaling
JPY 1,163,247 thousand was implemented.
Name of property

Location

PurposeTime of implementation

Payment(JPY thousand)

D18

Hotel MyStays
Kiyosumi Shirakawa

Koto-ku,Tokyo

Renovation work

From July 2019
To December 2019

190,601

D09

Hotel MyStays
Yokohama

Yokohama-shi,
Renovation work
Kanagawa

From July 2019
To December 2019

169,218

D53

Hotel MyStays
Sapporo Station

Sapporo-shi,
Hokkaido

Renovation work

From July 2019
To December 2019

48,046

D22

Hotel MyStays
Hakodate-Goryokaku

Hakodate-shi,
Hokkaido

Parking lot repair work

From July 2019
To December 201945,100D43

Hotel MyStays
Gotanda Station

Shinagawa-ku,
Conversion of guestrooms
Tokyo

From July 2019
To December 201913,815
671,647

Other construction

1,138,430

Total- 53 -

3

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
maintenance repairs 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(Unit: JPY thousand)
29th
30th
31st
32nd
33rd
fiscal period
fiscal period
fiscal period
fiscal period
fiscal period
From July 1, 2017 From January 1, From July 1, 2018 From January 1, From July 1, 2019
to December 31, 2018 to June 30, to December 31, 2019 to June 30, to December 31,
2017
2018
2018
2019
2019
1,397,243

1,566,108

1,611,828

1,814,515

2,039,622

697,444468,448

618,404

1,215,476

1,621,422

528,579

422,728

415,718

990,368

1,117,818

1,566,108

1,611,828

1,814,515

2,039,622

2,543,226(Note) The amount reserved for the relevant fiscal period includes the reserves for acquired properties, and the amountreversed includes the reserves for disposed properties.

- 54 -

Overview of Expenses and Liabilities
1

Statement of Operating Expenses(JPY thousand)32nd fiscal period
January 1, 2019 to June 30, 2019
300,000
22,23347,312
4,800
125,217499,564

Item(a) Asset management fees(b) Asset custody fees(c) Administrative services fees(d) Directors’ compensation(e) OtherTotal

2

33rd fiscal period
July 1, 2019 to December 31, 2019
300,000
25,51857,4444,800
129,956
517,719

Borrowing Conditions

Borrowing conditions by financial institution at the end of the Reporting Period are as below.
Type

LenderBalance atBalance at
Borrowing beginning of end of Reportingdate
Reporting Period
Period(JPY thousand) (JPY thousand)

Mizuho Bank, Ltd.
MUFG Bank, Ltd.
Short-term
Sumitomo Mitsui Banking
loans
Corporation
Sumitomo Mitsui Trust
Bank, Limited
SubtotalJul. 19,2019―

671,000―

671,500―

671,500―

672,000―

2,686,000

Mizuho Bank, Ltd.

5,992,000―

MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Shinsei Bank, Limited
Citibank, N.A., Tokyo
BranchSumitomo Mitsui Trust
Bank, Limited
Resona Bank, Limited

5,992,000―

5,992,000―

3,330,000―

3,000,000―

2,670,000―

1,335,000―

Jul. 16,2015

MUFG Bank, Ltd.

668,000―

Mizuho Bank, Ltd.

5,992,000

5,992,000

5,992,000

5,992,000

5,992,000

5,992,000

3,330,000

3,330,000

3,000,000

3,000,000

2,670,000

2,670,000

1,335,000

1,335,000

668,000

668,000

3,682,000―

3,400,000

3,400,000

850,000

850,000

Long-term MUFG Bank, Ltd.
loans
Sumitomo Mitsui Banking（Note 4）
Corporation
Shinsei Bank, Limited
Citibank, N.A., Tokyo
BranchSumitomo Mitsui Trust
Bank, Limited
Resona Bank, Limited

Jul. 16,2015

MUFG Bank, Ltd.
Mizuho Bank, Ltd.

Aug. 28,
2015

Sumitomo Mitsui Trust
Bank, Limited
MUFG Bank, Ltd.

Jan. 22,2016- 55 -

Averageinterest
Repayment Repayment Purpose
rate
date
method(%)(Note 1)

Notes

0.269

Jul. 18,
2020

Unsecured(Note 3) (Note 2) / with noguarantee

0.480

Jul. 16,2019

Unsecured(Note 3) (Note 2) / with noguarantee

0.590Jul. 16,
2020

Unsecured(Note 3) (Note 2) / with noguarantee

0.480

Aug. 28,
2019

0.600

Jan. 22,2021

Unsecured(Note 3) (Note 2) / with noguarantee
Unsecured(Note 3) (Note 2) / with noguarantee

Type

LenderBalance atBalance at
Borrowing beginning of end of Reportingdate
Reporting Period
Period(JPY thousand) (JPY thousand)

Mizuho Bank, Ltd.

965,000

965,000

MUFG Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Shinsei Bank, Limited

1,125,000

1,125,000

2,180,000

2,180,000

570,000

570,000

Resona Bank, Limited

570,000

570,000

MUFG Bank, Ltd.

650,000

650,000

Japan Post Bank Co., Ltd.

Mar. 31,2016

2,000,000

2,000,000

The Bank of Fukuoka, Ltd.

333,000

333,000

The Shizuoka Bank, Ltd.

270,000

270,000

The Kagawa Bank, Ltd.

500,000

500,000

The Hyakugo Bank, Ltd.
The Nomura Trust andBanking Co., Limited
Mizuho Bank, Ltd.

1,000,000

1,000,000

270,000

270,000

1,965,000

1,965,000

MUFG Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Shinsei Bank, Limited

1,125,000

1,125,000

2,180,000

2,180,000

570,000

570,000

Resona Bank, Limited

570,000

570,000

650,000

650,000

The Bank of Fukuoka, Ltd.

1,333,000

1,333,000

The Shizuoka Bank, Ltd.

270,000

270,000

The Kagawa Bank, Ltd.
Long-termloans
The Hiroshima Bank, Ltd.
(Note 4) The Nomura Trust and

500,000

500,000

1,000,000

1,000,000

270,000

270,000

MUFG Bank, Ltd.

Mar. 31,
2016

Banking Co., Limited

Averageinterest
Repayment Repayment Purpose
rate
date
method(%)(Note 1)

Notes

Unsecured/ with no
guarantee

0.569

Mar. 20,
2020(Note 3) (Note 2)

0.669

Mar. 30,
2021

Unsecured(Note 3) (Note 2) / with noguarantee

Unsecured(Note 3) (Note 2) / with noguarantee
Unsecured(Note 3) (Note 2) / with noguarantee
Unsecured(Note 3) (Note 2) / with noguarantee
Unsecured(Note 3) (Note 2) / with noguarantee

Citibank, N.A., Tokyo
BranchJun. 15,2016

1,000,000

1,000,000

0.569

Jun. 15,
2020

Citibank, N.A., Tokyo
BranchJun. 15,2016

1,000,000

1,000,000

0.669

Jun. 15,2021

AEON Bank, Ltd.

Jun. 30,2016

3,000,000

3,000,000

0.669

Jun. 30,
2021

Tokyo Star Bank, Limited

Jul. 20,2016

700,000―

0.465

Jul. 20,
2019Tokyo Star Bank, Limited（Note ５）The Towa Bank, Ltd.
（Note ５）

Jul. 20,2016

1,600,000

600,000
0.569

Jul. 20,
2020

Unsecured(Note 3) (Note 2) / with noguarantee

Tokyo Star Bank, Limited

Jul. 20,
2016

0.669

Jul. 20,
2021

Unsecured(Note 3) (Note 2) / with noguarantee

0.469

Mar. 14,2020

Unsecured(Note 3) (Note 2) / with noguarantee

Mizuho Bank, Ltd.
Development Bank ofJapan, Inc.
Resona Bank, Limited
The Bank of Fukuoka, Ltd.
The Nomura Trust andBanking Co., Limited
The Towa Bank, Ltd.

Mar. 14,2017―

1,000,000

1,700,000

1,700,000

634,000

634,000

1,000,000

1,000,000

333,000

333,000

333,000

333,000

333,000

333,000

252,000

252,000

The Shizuoka Bank, Ltd.

200,000

200,000

The Gunma Bank, Ltd.

165,000

165,000- 56 -

Type

LenderMizuho Bank, Ltd.

Average
Balance atBalance at
Borrowing beginning of end of Reporting interest
Repayment Repayment Purpose
rate
date
Reporting Period
Perioddatemethod(%)(JPY thousand) (JPY thousand) (Note1)
1,633,000
1,633,000

Resona Bank, Limited

333,000

333,000

The Bank of Fukuoka, Ltd.
The Nomura Trust andBanking Co., Limited
The Towa Bank, Ltd.

333,000

333,000

333,000

333,000

Mar. 14,2017

253,000

253,000

The Shizuoka Bank, Ltd.

200,000

200,000

The Gunma Bank, Ltd.

165,000

165,000

Mizuho Bank, Ltd.

1,733,000

1,733,000

Resona Bank, Limited

333,000

333,000

The Bank of Fukuoka, Ltd.
The Nomura Trust andBanking Co., Limited
AEON Bank, Ltd.

333,000

333,000

333,000

333,000

900,000

900,000

The Towa Bank, Ltd.

253,000

253,000

The Shizuoka Bank, Ltd.
The Daiichi Life InsuranceCo., Ltd.
The Gunma Bank, Ltd.

200,000

200,000

500,000

500,000

165,000

165,000

3,000,000

3,000,000

4,321,000

4,321,000

3,000,000

3,000,000

355,000

355,000

355,000

355,000

334,000

334,000

300,000

300,000

190,000

190,000

167,000

167,000

167,000

167,000

355,000

355,000

355,000

355,000

333,000

333,000

300,000

300,000

AEON Bank, Ltd.
The Nomura Trust andBanking Co., Limited
The Hiroshima Bank, Ltd.

190,000

190,000

167,000

167,000

167,000

167,000

Mizuho Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Sumitomo Mitsui Banking
Corporation
Shinsei Bank, Limited
Citibank, N.A., Tokyo
BranchResona Bank, Limited
Development Bank ofJapan, Inc.
The Bank of Fukuoka, Ltd.

500,000

500,000

500,000

500,000

500,000

500,000

355,000

355,000

355,000

355,000

333,000

333,000

1,500,000

1,500,000

300,000

300,000

190,000

190,000

166,000

166,000

166,000

166,000

500,000

500,000

Sumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.
The Daiichi Life InsuranceCo., Ltd.
Shinsei Bank, Limited
Citibank, N.A., Tokyo
BranchResona Bank, Limited

Longterm loans The Bank of Fukuoka, Ltd.
(Note 4)
AEON Bank, Ltd.
The Nomura Trust andBanking Co., Limited
The Hiroshima Bank, Ltd.

Mar. 14,2017

Mar. 14,2017
May 29,2017

Oct. 13,2017

Shinsei Bank, Limited
Citibank, N.A., Tokyo
BranchResona Bank, Limited
The Bank of Fukuoka, Ltd.

AEON Bank, Ltd.
The Nomura Trust andBanking Co., Limited
The Hiroshima Bank, Ltd.
The Daiichi Life InsuranceCo., Ltd.

Oct. 13,2017

Oct. 13,2017- 57 -

Notes

0.569

Mar. 14,2021

Unsecured(Note 3) (Note 2) / with noguarantee

0.669

Mar. 14,2022

Unsecured(Note 3) (Note 2) / with noguarantee

0.519

Sep. 14,2020

Unsecured(Note 3) (Note 2) / with noguarantee

0.619

Nov 29,2021

Unsecured(Note 3) (Note 2) / with noguarantee

0.369

Oct 13,2020

Unsecured(Note 3) (Note 2) / with noguarantee

0.469

Oct 13,2021

Unsecured(Note 3) (Note 2) / with noguarantee

0.669

Oct 13,2022

Unsecured(Note 3) (Note 2) / with noguarantee

Type

LenderMizuho Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Sumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Sumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Shinsei Bank, Limited
MUFG Bank, Ltd.

Average
Balance atBalance at
Borrowing beginning of end of Reporting interest
Repayment Repayment Purpose Notes
rate
date
Reporting Period
Perioddatemethod(%)(JPY thousand) (JPY thousand) (Note1)
1,250,000
1,250,000
UnsecuredOct. 13,
13,
1,065,000
1,065,000
0.769 Oct
(Note 3) (Note 2) / with no
2017
2023
guarantee
1,250,000
1,250,000
1,250,000

1,250,000

1,060,000

1,060,000

1,250,000

1,250,000

Oct. 13,2017

1,850,000―

1,850,000―

Jun. 27,2018

1,000,000

1,000,000

Oct. 13,2017

500,000

500,000

Mizuho Bank, Ltd.

2,442,000

2,442,000

MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Shinsei Bank, Limited
Citibank, N.A., Tokyo
BranchSumitomo Mitsui Trust
Bank, Limited
Mizuho Bank, Ltd.

2,220,000

2,220,000

1,998,000

1,998,000

1,110,000

1,110,000

1,000,000

1,000,000

MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Shinsei Bank, Limited
Citibank, N.A., Tokyo
BranchSumitomo Mitsui Trust
Bank, Limited
Longterm loans Mizuho Bank, Ltd.
（Note 4）
MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Shinsei Bank, Limited
Citibank, N.A., Tokyo
BranchSumitomo Mitsui Trust
Bank, Limited
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
MUFG Bank, Ltd.
Shinsei Bank, Limited
Citibank, N.A., Tokyo
BranchThe Nomura Trust andBanking Co., Limited
AEON Bank, Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
MUFG Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Shinsei Bank, Limited
Citibank, N.A., Tokyo
BranchDevelopment Bank ofJapan, Inc.
Resona Bank, Limited
The Nomura Trust andBanking Co., Limited
AEON Bank, Ltd.

Jul. 17,
2018

Jul. 17,
2018

Jul. 17,
2018

Aug. 2,2018

Sep 26,
2018

890,000

890,000

2,443,000

2,443,000

2,220,000

2,220,000

1,997,000

1,997,000

1,110,000

1,110,000

1,000,000

1,000,000

890,000

890,000

2,442,000

2,442,000

2,220,000

2,220,000

1,997,000

1,997,000

1,110,000

1,110,000

1,000,000

1,000,000

890,000

890,000

766,000

766,000

766,000

766,000

467,000

467,000

150,000

150,000

120,000

120,000

30,00030,00060,00060,0002,521,500

2,521,500

2,521,500

2,521,500

2,133,000

2,133,000

1,000,000

1,000,000

684,000

684,000

546,000

546,000

500,000

500,000

445,000

445,000

137,000

137,000

273,000

273,000- 58 -

0.869

Oct 11,
2024

Unsecured(Note 3) (Note 2) / with noguarantee

0.327

Oct. 13,2019

Unsecured(Note 3) (Note 2) / with noguarantee

0.750

Jun 27,2023

Unsecured(Note 3) (Note 2) / with noguarantee

0.369

Jul 17,2021

Unsecured(Note 3) (Note 2) / with noguarantee

0.469

Jul 17,2022

Unsecured(Note 3) (Note 2) / with noguarantee

0.569

Jul 14,2023

Unsecured(Note 3) (Note 2) / with noguarantee

0.369

Aug 02,2021

Unsecured(Note 3) (Note 2) / with noguarantee

0.369

Sep 26,2021

Unsecured(Note 2) (Note 2) / with noguarantee

Type

LenderMizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
MUFG Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Shinsei Bank, Limited
Citibank, N.A., Tokyo
BranchDevelopment Bank ofJapan, Inc.
Resona Bank, Limited
The Nomura Trust andBanking Co., Limited
AEON Bank, Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
MUFG Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Shinsei Bank, Limited
Citibank, N.A., Tokyo
BranchDevelopment Bank ofJapan, Inc.
Resona Bank, Limited
The Nomura Trust andBanking Co., Limited
AEON Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Mizuho Bank, Ltd.

Average
Balance atBalance at
Borrowing beginning of end of Reporting interest
Repayment Repayment Purpose
rate
date
Reporting Period
Perioddatemethod(%)(JPY thousand) (JPY thousand) (Note1)
3,287,000
3,287,000

Sep. 26,
2018

Sep. 26,
2018

Jan. 22,2019

Longterm loans（Note 4） MUFG Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Shinsei Bank, Limited
Resona Bank, Limited
Development Bank ofJapan, Inc.
The Bank of Fukuoka, Ltd.
The Shizuoka Bank, Ltd.
The Nomura Trust andBanking Co., Limited
The Senshu Ikeda Bank,
Ltd.
Aozora Bank, Ltd
The Nishi-Nippon City
Bank, Ltd.
The Tochigi Bank, Ltd.

Mar. 29,2019

Mar. 29,2019

3,287,000

3,287,000

2,600,000

2,600,000

1,000,000

1,000,000

833,000

833,000

667,000

667,000

500,000

500,000

445,000

445,000

167,000

167,000

334,000

334,000

3,287,500

3,287,500

3,287,500

3,287,500

2,600,000

2,600,000

1,000,000

1,000,000

833,000

833,000

667,000

667,000

500,000

500,000

445,000

445,000

166,000

166,000

333,000

333,000

850,000

850,000

3,400,000

3,400,000

386,000

386,000

1,275,000

1,275,000

2,100,000

2,100,000

500,000

500,000

500,000

500,000

1,000,000

1,000,000

333,000

333,000

1,270,000

1,270,000

270,000

270,000

300,000

300,000

1,000,000

1,000,000

1,000,000

1,000,000

Notes

0.469

Sep 26,2022

Unsecured/ with no(Note 3) (Note 2) guarantee

0.569

Sep 26,2023

Unsecured/ with no(Note 3) (Note 2) guarantee

0.373

Jan 22,2022

Unsecured/ with no(Note 3) (Note 2) guarantee

0.361

Mar 29,2022

Unsecured/ with no(Note 3) (Note 2) guarantee

0.594

Mar 29,2024

Unsecured/ with no(Note 3) (Note 2) guarantee

500,000

500,000

Kiraboshi Bank, Ltd.

Mar. 29,2019

1,000,000

1,000,000

0.869

Mar 29,2029

Citibank, N.A., Tokyo
BranchJun. 17,2019

1,000,000

1,000,000

0.340

Jun 17,2022

Development Bank ofJapan, Inc.

Jun. 28,2019

1,000,000

1,000,000

0.334

Jun 17,2022

Unsecured(Note 3) (Note 2) / with noguarantee
Unsecured(Note 3) (Note 2) / with noguarantee
Unsecured(Note 3) (Note 2) / with noguarantee

Mizuho Bank, Ltd.

―571,400

MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust
Bank, Limited
Citibank, N.A., Tokyo
BranchShinsei Bank, Limited―

1,464,800―

1,331,200―

628,600

0.400

Jan 16,2023―

1,000,000

Unsecured(Note 3) (Note 2) / with noguarantee―

200,000―

600,000

Resona Bank, Limited

Jul. 16,2019- 59 -

Type

LenderMizuho Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust
Bank, Limited
Citibank, N.A., Tokyo
BranchShinsei Bank, Limited

Average
Balance atBalance at
Borrowing beginning of end of Reporting interest
Repayment Repayment Purpose
rate
date
Reporting Period
Perioddatemethod(%)(JPY thousand) (JPY thousand) (Note 1)―
571,400―

1,464,800―

1,331,200―

628,600―

1,000,000―

200,000

Resona Bank, Limited―

600,000

Mizuho Bank, Ltd.

―

1,171,400

MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust
Bank, Limited
Citibank, N.A., Tokyo
BranchShinsei Bank, Limited―

1,464,800―

1,331,200―

628,600―

1,000,000―

200,000

Mizuho Bank, Ltd.

―

2,171,400

MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust
Bank, Limited
Shinsei Bank, Limited―

1,464,800―

1,331,200―

628,600

Jul. 16,
2019

Jul. 16,
2019

Jul. 16,2019―

200,000―

2,170,400―

1,464,800―

1,331,200―

628,600―

200,000

Mizuho Bank, Ltd.

―1,085,000

MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust
Bank, Limited
Citibank, N.A., Tokyo
BranchDevelopment Bank ofJapan, Inc.
AEON Bank, Ltd.
The Nomura Trust andBanking Co., Limited
Mizuho Bank, Ltd.

―

987,000―

987,000―

684,000―

500,000―

300,000―

300,000―

100,000―

712,000―

986,000―

986,000―

684,000―

500,000―

300,000―

300,000―

100,000―

375,000

Mizuho Bank, Ltd.
Long- MUFG Bank, Ltd.
term loans Sumitomo Mitsui Banking(Note 4) Corporation
Sumitomo Mitsui Trust
Bank, Limited
Shinsei Bank, Limited

MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust
Bank, Limited
Citibank, N.A., Tokyo
BranchDevelopment Bank ofJapan, Inc.
AEON Bank, Ltd.
The Nomura Trust andBanking Co., LimitedAozora Bank, Ltd.

Jul. 16,
2019

Jul. 19,2019

Jul. 19,2019- 60 -

Notes

0.499

Jan 16,2024

Unsecured(Note 3) (Note 2) / with noguarantee

0.563

Jul 16,2024

Unsecured(Note 3) (Note 2) / with noguarantee

0.619

Jan 16,2025

Unsecured(Note 3) (Note 2) / with noguarantee

0.769

Jul 16,2025

Unsecured(Note 3) (Note 2) / with noguarantee

0.413

Jan 16,2023

Unsecured(Note 3) (Note 2) / with noguarantee

0.525

Jan 16,2024

Unsecured(Note 3) (Note 2) / with noguarantee

Type

LenderMizuho Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust
Bank, Limited
Citibank, N.A., Tokyo
BranchDevelopment Bank ofJapan, Inc.
AEON Bank, Ltd.
The Nomura Trust andBanking Co., LimitedAozora Bank, Ltd..,

Average
Balance atBalance at
Borrowing beginning of end of Reporting interest
Repaymen Repayment Purpose
rate
date
Reporting Period
Periodt datemethod(%)(JPY thousand) (JPY thousand) (Note 1)―
712,000

Jul. 19,2019

Mizuho Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust
Bank, Limited
Development Bank ofJapan, Inc.
AEON Bank, Ltd.
The Nomura Trust andLong-term Banking Co., Limitedloans
Aozora Bank, Ltd.
(Note 4)
Mizuho Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust
Bank, Limited
Development Bank ofJapan, Inc.
AEON Bank, Ltd.
The Nomura Trust andBanking Co., LimitedAozora Bank, Ltd.

Jul. 19,2019

Jul. 19,2019―

986,000―

986,000―

684,000―

500,000―

300,000―

300,000―

100,000―

375,000―

1,212,000―

986,000―

986,000―

684,000―

300,000―

300,000―

100,000―

375,000―

1,211,000―

986,000―

986,000―

684,000―

300,000―

300,000―

100,000

Notes

0.580

Jul 16,2024

Unsecured(Note 3) (Note 2) / with noguarantee

0.619

Jan 16,2025

Unsecured(Note 3) (Note 2) / with noguarantee

0.769

Jul 16,2025

Unsecured(Note 3) (Note 2) / with noguarantee

0.769

Jul 16,
2025

0.462

Jan 16,2024

Unsecured(Note 3) (Note 2) / with noguarantee
Unsecured(Note 3) (Note 2) / with noguarantee
Unsecured(Note 3) (Note 2) / with noguarantee
Unsecured(Note 3) (Note 2) / with noguarantee
Unsecured(Note 3) (Note 2) / with noguarantee―

375,000

Tokyo Star Bank, Limited

Jul. 22,2019―

700,000

Mizuho Bank, Ltd.

―2,882,000

The Daisan Bank, Ltd.

Aug. 28,2019―

800,000

The Daisan Bank, Ltd.

Oct. 15,2019―

1,700,000

0.486

Apr 15,2024

The Daisan Bank, Ltd.

Oct. 15,2019―

1,000,000

0.619

Apr 15,2025

The Nishi-Nippon City
Bank, Ltd.

Oct. 15,2019―

1,000,000

0.769

Oct 15,2025

Subtotal

224,774,000

249,488,000

Total

224,774,000

252,174,000(Note 1) Average interest rate shows the interest rate for each loan agreement as of the end of the fiscal period, rounded to three decimal places. In regards to borrowings which interest rate
swap transactions are entered into for the purpose of avoiding risk from interest rate fluctuation, interest rates reflecting the interest rate swap are shown. In regards to borrowings
repaid during the Reporting Period, the interest rate for each loan agreement as of the repayment date rounded to three decimal places is shown.
(Note 2) The funds raised through borrowings are mainly used to acquire trust beneficiary interests in real estate and to prepay the borrowings.
(Note 3) The balance at the end of the period will be repaid in full on the repayment date.
(Note 4) Long-term loans includes current portion of long-term loans payable.
(Note 5) JPY 1 million of the existing loan transferred from Tokyo Star Bank, Limited to The Towa Bank, Ltd. on December 25, 2019.

- 61 -

3

Investment Corporation Bonds
Status of investment corporation bonds as of the end of the Reporting Period is as follows.
Bond Series

Issue DateFirst Series Unsecured
Investment
May 25, 2018
Corporation Bonds(Note 1)
Second Series
Unsecured Investment
May 25, 2018
Corporation Bonds(Note 1)
Third Series
Unsecured Investment
October 12, 2018
Corporation Bonds(Note 1)Forth Series
Unsecured Investment
October 28, 2019
Corporation Bonds(Note 1)Fifth Series
Unsecured Investment
October 28, 2019
Corporation Bonds(Note 1)

Balance at theBalance at the Interest Rate
beginning of the
Redemption Use of
end of the period
Redemption Date(%)
periodmethodfunds(JPY thousand)(JPY thousand)
1,000,000

1,000,000

0.400

May 25, 2023

(Note 2)

(Note 3)1,000,000

1,000,000

0.800

May 25, 2028

(Note 2)

(Note 3)2,000,000

2,000,000

0.550

October 12, 2023

(Note 2)

(Note 4)－1,000,000

0.480

October 28, 2024

(Note 2)

(Note 5)－2,000,000

0.900

October 26, 2029

(Note 2)

(Note 5)

Security/
Guaranty

Unsecured /Unguaranteed

Total
4,000,000
7,000,000－－－－－(Note 1) This is with pari passu conditions among specified corporate bonds.
(Note 2) The Investment Corporation Bonds may be purchased and cancelled at any time after the payment date, except for the case where the laws
and regulations or the depository otherwise stipulates.
(Note 3) The funds will be used to acquire trust beneficiary interest in real estate.
(Note 4) The funds will be used to repay borrowings.
(Note 4) The funds will be used in strategic capital expenditure.

4

Short-Term Investment Corporation Bonds

Not applicable
5

Investment Unit Options

Not applicable- 62 -

Acquisitions and Sales for the Fiscal Period Ended June 30, 20191

Acquisitions and Sales of Real Estate, Asset-Backed Securities, Infrastructure Assets andInfrastructure Related-Assets
Acquisition
Type of
asset

Sale
Sales price

Acquisition

Name of property
Acquisition date

price

Sales date

(JPY million)
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest

million)(Note 1)

Book value(JPY
million)Gain/loss on
sales
(JPY
million)D64 Hotel MyStays Sapporo Aspen

July 19, 201915,543－－－－

D65 Art Hotel Ishigakijima

July 19, 2019

9,731

－

－

－

－

D66 Hotel MyStays Fuji Onsen Resort

July 19, 2019

9,405

－

－

－

－

D67 Hotel Sonia Otaru

July 19, 2019

5,930

－

－

－

－

D68 Hotel MyStays Kanazawa Castle

July 19, 2019

5,682

－

－

－

－

D69 Art Hotel Niigata Station

July 19, 2019

5,524

－

－

－

－

D70 Hotel MyStays Nagoya Nishiki

July 19, 2019

5,197

－

－

－

－

D71 Hotel Nord Otaru

July 19, 2019

4,296

－

－

－

－

D72 Hotel MyStays Kagoshima Tenmonkan

July 19, 2019

3,445

－

－

－

－

D73 Art Hotel Asahikawa

July 19, 2019

3,197

－

－

－

－

D74 Hotel MyStays Matsuyama

July 19, 2019

3,098

－

－

－

－

D75 Hotel MyStays Sapporo Susukino

July 19, 2019

3,059

－

－

－

－

D76 Hotel Mystays Sapporo Nakajima Park

July 19, 2019

2,118

－

－

－

－

D77 Hotel MyStays Sapporo Nakajima Park Annex

July 19, 2019

1,584

－

－

－

－

D78 Flexstay Inn Sakuragicho

July 19, 2019

1,425

－

－

－

－

D79 MyCUBE by MYSTAYS Asakusa Kuramae

July 19, 2019

1,287

－

－

－

－

D80 Hotel MyStays Kagoshima Tenmonkan Annex

July 19, 2019

1,168

－

－

－

－

D81 Hotel MyStays Nayoro

July 19, 2019

957

－

－

－

－

A52 Winbell Kagurazaka－－

December 17,
2019

5,135

2,992

1,970

－

5,135

2,992

1,970

Total
(Note 1)

(JPY

82,646

Acquisition price or sales price do not include various costs (brokerage commissions, taxes and other public dues) required for sale of the property, and is the sales priceindicated in the trust beneficiary interest purchase agreement.

- 63 -

2

Acquisitions and Sales of Other Assets

Assets other than those described above were mostly bank deposits or bank deposits in trust.
3

Transaction Price Verification of Specified Assets

Real Estate Transactions
Acquisition /Acquisitionor saleName of property

Category of
specified asset

Transaction

Sales price

date(JPY million)(Note 1)

Acquisition

Acquisition

Acquisition

Acquisition

Acquisition

Acquisition

Acquisition

Acquisition

Acquisition

Acquisition

Acquisition

Acquisition

Acquisition

Acquisition

Acquisition

Acquisition

Acquisition

Acquisition

Sale(Note 1)
(Note 2)

Real estate
D64 Hotel MyStays Sapporo Aspen Trust beneficiary July 19, 2019
interest
Real estate
Trust beneficiary July 19, 2019
D65 Art Hotel Ishigakijima
interest
Real estate
Hotel MyStays Fuji Onsen
Trust beneficiary July 19, 2019
D66
Resortinterest
Real estate
Trust beneficiary July 19, 2019
D67 Hotel Sonia Otaru
interest
Real estate
Hotel MyStays Kanazawa
Trust beneficiary July 19, 2019
D68
Castleinterest
Real estate
Trust beneficiary July 19, 2019
D69 Art Hotel Niigata Stationinterest
Real estate
D70 Hotel MyStays Nagoya Nishiki Trust beneficiary July 19, 2019
interest
Real estate
Trust beneficiary July 19, 2019
D71 Hotel Nord Otaru
interest
Real estate
Hotel MyStays Kagoshima
Trust beneficiary July 19, 2019
D72
Tenmonkan
interest
Real estate
Trust beneficiary July 19, 2019
D73 Art Hotel Asahikawa
interest
Real estate
Trust beneficiary July 19, 2019
D74 Hotel MyStays Matsuyama
interest
Real estate
Hotel MyStays Sapporo
Trust beneficiary July 19, 2019
D75
Susukino
interest
Real estate
Hotel Mystays Sapporo
Trust beneficiary July 19, 2019
D76
Nakajima Park
interest
Real estate
Hotel MyStays Sapporo
Trust beneficiary July 19, 2019
D77
Nakajima Park Annexinterest
Real estate
Trust beneficiary July 19, 2019
D78 Flexstay Inn Sakuragichointerest
Real estate
MyCUBE by MYSTAYS
Trust beneficiary July 19, 2019
D79
Asakusa Kuramaeinterest
Real estate
Hotel MyStays Kagoshima
Trust beneficiary July 19, 2019
D80
Tenmonkan Annexinterest
Real estate
Trust beneficiary July 19, 2019
D81 Hotel MyStays Nayoro
interest
Real estate
December 17,
Trust beneficiary
A52 Winbell Kagurazaka
2019interest

Appraisal
value

Appraiser(JPY million)

Appraisaldate

15,54315,700The Tanizawa Sōgō
Appraisal Co., Ltd.

April 1, 2019

9,731

9,830

Japan Real Estate
Institute

April 1, 2019

9,405

9,500

Japan Real Estate
Institute

April 1, 2019

5,930

5,990

The Tanizawa Sōgō
Appraisal Co., Ltd.

April 1, 2019

5,682

5,740

The Tanizawa Sōgō
Appraisal Co., Ltd.

April 1, 2019

5,524

5,580

The Tanizawa Sōgō
Appraisal Co., Ltd.

April 1, 2019

5,197

5,250

JLL Morii Valuation &April 1, 2019
Advisory K.K.

4,296

4,340

The Tanizawa Sōgō
Appraisal Co., Ltd.

April 1, 2019

3,445

3,480

Daiwa Real EstateAppraisal Co., Ltd.

April 1, 2019

3,197

3,230

The Tanizawa Sōgō
Appraisal Co., Ltd.

April 1, 2019

3,098

3,130

Daiwa Real EstateAppraisal Co., Ltd.

April 1, 2019

3,059

3,090

JLL Morii Valuation &April 1, 2019
Advisory K.K.

2,118

2,140

JLL Morii Valuation &April 1, 2019
Advisory K.K.

1,584

1,600

The Tanizawa Sōgō
Appraisal Co., Ltd.

April 1, 2019

1,425

1,440

Daiwa Real EstateAppraisal Co., Ltd.

April 1, 2019

1,287

1,300

Daiwa Real EstateAppraisal Co., Ltd.

April 1, 2019

1,168

1,180

Daiwa Real EstateAppraisal Co., Ltd.

April 1, 2019

957

967

JLL Morii Valuation &April 1, 2019
Advisory K.K.

5,135

4,450

JLL Morii Valuation & November 1,
Advisory K.K.
2019

Acquisition price or sales price do not include various costs (brokerage commissions, taxes and other public dues) required for acquisition of the property and is the purchaseprice indicated in the trust beneficiary interest purchase agreement.
The real estate appraisal described above is conducted by applying “Section 3: appraisals concerning prices of real estate subject to securitization” of “Real Estate Appraisal
Standard.”- 64 -

4

Transactions with Interested Parties(1) Transactions
Not applicable(2) Commissions Paid
Not applicable
5

Transactions between the Asset Manager and Its Other Businesses

As the Asset Manager (Consonant Investment Management Co., Ltd.) does not engage in any other business,such as the type I financial instruments business and the type II financial instruments business, the building
lots and buildings transaction business, or the real estate specified joint enterprise, there are no applicabletransactions.

- 65 -

Financial Condition
1

Assets, Liabilities, Principal, and Profit and Loss

Please refer to “II. Balance Sheet,” “III. Statement of Income and Retained Earnings,” “IV. Statement of
Changes in Net Assets,” “V. Notes to Financial Statements” and “VI. Statement of Cash Distribution.”
2

Changes in the Calculation Method of Depreciation

Not applicable
3

Changes in the Evaluation Method of Real Estate and Infrastructure Assets, etc.

Not applicable4

Beneficiary Certificates of Investment Trusts, etc. Set Up by the Company

Not applicable- 66 -

Other1

Notice(1) General Meeting of Unitholders
INV’s General Meeting of Unitholders was held on December 18, 2019.
The summary of the matters approved at the General Meeting of Unitholders are as follows.
AgendaProposal No. 1

Proposal No. 2
Proposal No. 3
Proposal No. 4

Summary

Partial Amendment to
Articles ofIncorporation

Appointment of One (1)Executive Director
Appointment of One (1)Substitute Executive
Director
Appointment of Two (2)Supervisory Directors

With the consent of the asset management company, the asset
management fees for the period from January 2013 to December
2019 had been reduced. INV has further obtained the consent of
the Asset Management Company to reduce the amount of asset
management fees for the period from January 2020 to December
2020 to an amount which is lower than the amount that would beapplicable if such reduction were not made, and which is at the samelevel as the amount applied for the period from January 2019 to
December 2019. Accordingly, the Investment Corporation will
amend the standards concerning the amount and payment of theasset management fees for the period from January 2020 to
December 2020., effective January 1, 2019.
Naoki Fukuda was appointed.
Naoto Ichiki was appointed.
Hiroyuki Fujimoto and Yoshihiro Tamura were appointed.

(2) Board of Directors of Investment Corporation
Of the execution and amendment of the principal agreement approved by INV’s Board of Directors in theReporting Period, principal summary is as follows.
Approval date

Item

July 1, 2019Conclusion of theunderwriting agreement
related to the issuance of
new investment units, etc.

October 10, 2019

Comprehensive resolution
on issuance of investment
corporation bonds

Summary
The Board of Directors of INV approved that INV would entrust
underwriters (Note) with the service related to the issuance of new
investment units through public offering and secondary offering ofinvestment units, which were approved at the meeting of the Board of
Directors of INV held on July 1, 2019.
Board of Directors passed a comprehensive resolution on issuance ofinvestment corporation bonds with a maximum total issue amount of
JPY 3.0 billion and an issuance period from October 28, 2019 toNovember 30, 2019; and entrustment of administrative duties
concerning offering of investment corporation bonds and generaladministrative duties as an issuing agent, fiscal agent, paying agent, etc.
to a prescribed general administrative agent.

(Note) The underwriters for the domestic public offering are Mizuho Securities Co., Ltd., SMBC Nikko Securities Inc., Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.,and Nomura Securities Co., Ltd.

The underwriters for the global offering mainly in the U.S., Europe and Asia are SMBC Nikko Capital Markets Limited, Morgan

Stanley & Co. International plc, Mizuho International plc, Citigroup Global Markets Limited and Nomura International plc.

- 67 -

2

Disclosure of Companies Owning Real Estate Overseas

Not applicable
3

Disclosure of Real Estate Owned by Companies Owning Real Estate Overseas

Not applicable
4

Other

Unless there are specific statements to the contrary, monetary figures are rounded down to the nearest yen
and percentages are rounded off for unspecified values.

- 68 -

II.

Balance Sheet(Unit: JPY thousand)(Reference)
Fiscal period ended
June 30, 2019(as of June 30, 2019)

AssetsCurrent assets:
Cash and bank deposits
Cash and bank deposits in trust
Accounts receivable
Rental receivables
Deposits paid
Prepaid expenses
Income taxes receivable
Consumption taxes receivable
Other
Allowance for doubtful accounts
Total current assets
Non-current assets:
Property and equipment
Buildings
Accumulated depreciation
Buildings, net
Buildings and accompanying facilities
Accumulated depreciation
Buildings and accompanying facilities, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Construction in progress
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Buildings and accompanying facilities in trust

Accumulated depreciation
Buildings and accompanying facilities in trust, net

Structures in trust, at cost
Accumulated depreciation
Structures in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Construction in progress in trust
Total property and equipment, net
Intangible assets
Leasehold rights
Leasehold rights in trust
Total intangible assets
Investment and other assets
Investment securities
Guarantee deposits
Long-term prepaid expenses
Derivatives assets
OthersTotal investments and other assets
Total non-current assets
Deferred assets
Investment corporation bond issuance costs
Total deferred assets
Total assets- 69 -

Fiscal period ended
December 31, 2019(as of December 31, 2019)48,833,358
6,766,348
647,2102,758,865
371,720
483,656
168,970(148)
60,029,983

17,924,733
10,862,669
613,5633,448,548
482,506
718,710
137,528
2,239,471
154
36,427,886

19,142,244(62,908)
19,079,335
5,111,168(42,886)
5,068,281
1,069,418(14,924)
1,054,494
9,817
130,105,036(13,178,580)
116,926,456*3 29,757,547(7,460,526)
22,297,021
227,665(94,980)
132,685
1,816,296(611,887)
1,204,408
199,037,787
14,364364,824,652

19,142,244(278,377)
18,863,867
5,111,514(190,462)
4,921,052
1,087,303(64,425)
1,022,877
534,690
159,549,904(15,114,933)
144,434,970
33,269,242(8,355,624)
24,913,618
234,012(100,967)
133,045
2,382,539(763,771)
1,618,767
245,771,234
3,179
442,217,302

10,637,811
12,864,608
23,502,420

10,637,811
13,265,876
23,903,688

17,856,387
803,721
601,259
255,404
22,667
19,539,440
407,866,513

17,856,387
803,721974,554
166,234
22,667
19,823,566
485,944,557

35,47835,478467,931,975

59,55659,556522,431,999

(Unit: JPY thousand)(Reference)
Fiscal period ended
June 30, 2019(as of June 30, 2019)

Fiscal period ended
December 31, 2019(as of December 31, 2019)

Liabilities
Current liabilities:
Accounts payable

511,902

Short-term loans payable

443,004-

2,686,000

51,744,000

50,130,000

Accounts payable-other136,155

125,221

Accrued expenses

362,920272,659

605

605

Current portion of long-term loans payable

Income taxes payable
Consumption taxes payable
Advances received
Deposits received
Total current liabilities

2,764,397-

454,614

798,980

26,15952,12856,000,754

54,508,599

Non-current liabilities:
Investment corporation bonds
Long-term loans payable

4,000,000

7,000,000

173,030,000

199,358,000

1,746,941

1,765,094

75,54337,007

Tenant leasehold and security deposits in trust
Derivatives liabilities
Asset retirement obligations

32,321

32,539Total non-current liabilities

178,884,805

208,192,641

234,885,560

262,701,240

211,092,540

235,701,512

6,264,432

6,264,432

Total liabilities
Net assets
Unitholders’ equity:
Unitholders’ capital
Surplus:Capital surplus
Deduction of unitholders' capital surplus
Allowance for temporary differences adjustment*2(131,332)*2(6,130)

Other deduction of capital surplus(5,398,804)(5,524,006)

Total deduction of unitholders' capital surplus(5,530,137)(5,530,137)

734,294734,294

Retained earnings

21,131,966

23,261,426

Total surplus

21,866,261

23,995,720

232,958,801

259,697,232

Deferred gains or losses on hedges

87,612

33,525

Total valuation and translation adjustments

87,612

33,525*1 233,046,414*1 259,730,758

467,931,975

522,431,999

Capital surplus, net

Total unitholders’ equity
Valuation and translation adjustments:

Total net assets
Total liabilities and net assets- 70 -

III.

Statement of Income and Retained Earnings(Unit: JPY thousand)(Reference)
Fiscal period ended
June 30, 2019(as of June 30, 2019)

Operating revenue
Rental revenue – real estateManagement contract revenue
Gain on sales of properties
Dividend income
TK Dividend amount
Total operating revenue
Operating expenses
Property-related expenses
Management contract expenses
Asset management fees
Directors’ compensation
Asset custody fees
Administrative service fees
Provision of allowance for doubtful accounts
Other
Total operating expenses
Operating income
Non-operating income
Interest income
Foreign exchange gains
Interest on tax refund
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Interest expenses on investment corporation bonds
Amortization of investment corporation bond issuancecosts
Loan-related costs
Investment unit issuance costs
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Subsidy income
Total extraordinary income
Extraordinary losses
Loss on reduction entry of non-current assets
Total extraordinary losses
Income before income taxes
Income taxes
Total income taxes
Net income
Retained earnings/losses brought forward
Unappropriated retained earnings/losses- 71 -

Fiscal period ended
December 31, 2019(as of December 31, 2019)*1 12,153,399*2
580,588*3 11,117,983
827,477
2,660,220
27,339,670*1 14,545,826*2 1,397,621*3 1,970,306
673,498
18,587,253*1 4,490,658*2 164,376
300,000
4,800
22,23347,312148
125,069
5,154,599
22,185,070*1 4,673,007*2 537,542
300,000
4,800
25,51857,444
129,956
5,728,269
12,858,984

811
1,005
800
2,617

179
40,710289
2,091
43,270588,555
33,648
11,405687,208
15,654

3,506

4,256

310,0890947,206
21,240,482

412,550
143,029
1
1,262,700
11,639,553

115,319
115,319-

115,319
115,319
21,240,482
605
605
21,239,877(107,910)
21,131,966

11,639,553
605
605
11,638,948
11,622,477
23,261,426

IV.

Statement of Changes in Net Assets(Reference) Fiscal period ended June 30, 2019 (from January 1, 2019 to June 30, 2019)(Unit: JPY thousand)Unitholders’ equity
SurplusCapital surplus
Unitholders’capitalDeduction of capital surplus
Allowance fortemporarydifferences
adjustment

Capital surplus

Balance at the beginningof the period
Changes during theperiodDistributions fromsurplusDistribution in excess
of retained earnings
from allowance fortemporary differences
adjustment
Other distribution inexcess of retained
earnings
Net income
Changes other thanunitholders’ equity(net)
Total changes during theperiodBalance at the end of theperiod211,092,540

6,264,432(46,329)(5,194,798)

Total
deduction ofcapital surplus

Capital surplus(net)(5,241,128)

1,023,303(85,002)(85,002)(204,006)(204,006)(204,006)(85,002)--(85,002)(204,006)(289,008)(289,008)

211,092,540

6,264,432(131,332)(5,398,804)(5,530,137)

734,294

Unitholders’ equity
SurplusRetained earnings
Balance at the beginningof the period
Changes during theperiodDistributions fromsurplusDistribution in excess
of retained earnings
from allowance fortemporary differences
adjustment
Other distribution inexcess of retained
earnings
Net income
Changes other thanunitholders’ equity(net)
Total changes during theperiodBalance at the end of theperiodOther
deduction ofcapital surplus

Totalunitholders’equityTotal surplus

Valuation and translation adjustments
Total
Deferredvaluation andgains or losses
translation
on hedges
adjustments

9,140,372

10,163,675

221,256,215(9,248,282)(9,248,282)(9,248,282)(9,248,282)(85,002)(85,002)(85,002)(204,006)(204,006)(204,006)

21,239,877

21,239,877

21,239,877

21,239,877

108,684

108,684

Total
net assets

221,364,900(21,072)(21,072)(21,072)

11,991,594

11,702,585

11,702,585(21,072)(21,072)

11,681,513

21,131,966

21,866,261

232,958,801

87,612

87,612233,046,414- 72 -

Fiscal period ended December 31, 2019 (from July 1, 2019 to December 31, 2019)(Unit: JPY thousand)Unitholders’ equity
SurplusCapital surplus
Deduction of capital surplus

Unitholders’capitalAllowance fortemporarydifferences
adjustment

Capital surplus

Balance at the beginningof the period
Changes during theperiodIssuance of new
investment units
Reversal of allowancefor temporary
differences adjustment
Distributions fromsurplus211,092,540

6,264,432

Otherdeduction ofcapital surplus

Total
deduction ofcapital surplus

Capital surplus(net)(131,332)(5,398,804)(5,530,137)

734,294

125,201(125,201)－－

24,483,770
125,201

Net income
Changes other thanunitholders’ equity(net)
Total changes during theperiodBalance at the end of theperiod

24,608,971－

125,201(125,201)－－

235,701,512

6,264,432(6,130)(5,524,006)(5,530,137)

734,294

Unitholders’ equity
Surplus

Balance at the beginningof the period
Changes during theperiodRetainedearnings

Total
surplus21,131,966

21,866,261

Valuation and translation adjustments
Totalunitholders’equity232,958,801

Issuance 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 theperiodDeferred
gains or losses
on hedges

Totalvaluation andtranslation
adjustments

87,612

87,612Total
net assets

233,046,414

24,483,770

24,483,770(125,201)(125,201)－－(9,384,287)(9,384,287)(9,384,287)(9,384,287)

11,638,948

11,638,948

11,638,948

11,638,948(54,086)(54,086)(54,086)

2,129,459

2,129,459

26,738,431(54,086)(54,086)

26,684,344

23,261,426

23,995,720

259,697,232

33,52533,525

259,730,758- 73 -

V.

Notes to Financial Statements[Notes Concerning Significant Accounting Policies]
By Period
Item(Reference)
Fiscal period ended
June 30, 2019(from January 1, 2019 toJune 30, 2019)

1. Evaluation standards and Other securities
evaluation method ofThose with no fair value
assetsCost method through moving-average method
is used.
2. Method of depreciationof non-current assets

Fiscal period ended
December 31, 2019(from July 1, 2019 to
December 31, 2019)
Other securitiesThose with no fair value
Cost method through moving-average method
is used.

(a) Property and equipment(a) Property and equipment
The straight-line method is used.
The straight-line method is used.
The useful lives of major property, plant
The useful lives of major property, plantand equipment are as follows.
and equipment are as follows.
Buildings
16-50 years
Buildings
16-50 years
Buildings and accompanying facilities
Buildings and accompanying facilities
5-29 years
5-29 years
Tools, furniture and fixtures
4-10 years
Tools, furniture and fixtures
3-10 years
Buildings in trust
5-67 years
Buildings in trust
5-67 years
Buildings and accompanying facilities in
Buildings and accompanying facilities intrust
2-33 years
trust
2-33 years
Structures in trust
3-55 years
Structures in trust
9-55 years
Tools, furniture and fixtures in trust
Tools, furniture and fixtures in trust
2-19 years
2-19 years(b) Intangible assets(b) Intangible assets
For fixed-term land lease for business
For fixed-term land lease for businesspurposes in Japan, the straight-line method
purposes in Japan, the straight-line method
based on the lease period is used.
based on the lease period is used.

(c) Long-term prepaid expenses(c) Long-term prepaid expenses
The straight-line method is used.
The straight-line method is used.
3. Accounting treatment of (a) Investment unit issuance costs(a) Investment unit issuance costs
deferred assets
The full amount is recorded as expense at
The full amount is recorded as expense at
the time of expenditure.
the time of expenditure.
(b) Investment corporation bond issuance costs (b) Investment corporation bond issuance costs
Investment corporation bond issuance costs
Investment corporation bond issuance costs
are amortized using the straight-line
are amortized using the straight-line
method over a period up to redemption of
method over a period up to redemption of
the investment corporation bonds.
the investment corporation bonds.
4. Method of calculating
Allowance for doubtful accounts
Allowance for doubtful accounts
allowances
To reserve for losses on doubtful accounts, To reserve for losses on doubtful accounts,
allowances are provided for normal receivables allowances are provided for normal receivables
using a rate determined based on past bad debt using a rate determined based on past bad debt
experiences, and specific allowances are experiences, and specific allowances areprovided for accounts with a possibility of provided for accounts with a possibility ofdefault based on the estimated amounts default based on the estimated amounts
considered to be uncollectible by considering considered to be uncollectible by considering
the collectability of accounts on an individual the collectability of accounts on an individual
basis.
basis.
5. Conversion of assets and Receivables and payables denominated in Receivables and payables denominated inliabilities in foreignforeign currencies are translated into yen at the foreign currencies are translated into yen at thecurrency into Japanesespot exchange rate at the end of the fiscal period spot exchange rate at the end of the fiscal periodyendate, and differences arising from the date, and differences arising from thetranslation are treated as a profit or loss.
translation are treated as a profit or loss.
6. Revenue and expense
Accounting treatment of property taxes and Accounting treatment of property taxes andrecognition
other taxes
other taxes
With respect to property taxes, city planning With respect to property taxes, city planningtaxes and depreciable asset taxes, of the tax taxes and depreciable asset taxes, of the tax- 74 -

By Period
Item

7. Method of hedge
accounting

8. Other significant
matters whichconstitute the basis for
preparation of financial
statements(Reference)
Fiscal period ended
June 30, 2019(from January 1, 2019 toJune 30, 2019)
amount assessed and determined, the amountcorresponding to the relevant fiscal period is
accounted for as property-related expenses.
Of the amounts paid to the seller for acquisitionsof real estate, the amount equivalent to property
taxes is capitalized as part of the acquisition costof the real estate or trust beneficiary interests inreal estate instead of being charged as expense.
The amount equivalent to property taxes thatwas included as part of the acquisition of realestate during the fiscal period ended June 2019is zero.
(a) Method of hedge accounting
Deferred hedge accounting is used.

(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(Scheduled foreign currency-denominatedtransactions)
Hedging instrument: Foreign exchange
optionHedged item: Scheduled foreign currencydenominated transaction(b) Hedging instrument and hedged item
Hedging instrument: interest rate swap
Hedged item: interest on borrowings(Scheduled foreign currency-denominatedtransactions)
Hedging instrument: Foreign exchange
optionHedged item: Scheduled foreign currencydenominated transaction(c) Hedge policy
INV enters into derivatives transactions forthe purpose of hedging against the risks set
forth in INV’s Articles of Incorporation inaccordance with its risk management
policy.

(c) Hedge policy
INV enters into derivatives transactions forthe purpose of hedging against the risks set
forth in INV’s Articles of Incorporation inaccordance with its risk management
policy.

(d) Method of evaluating hedge effectivenessHedge effectiveness is evaluated bycomparing the cumulative amount ofchanges in cash flows of the hedging
instrument and the cumulative amount ofchanges in cash flows of the hedged item
and verifying the difference in the amountsof change of both the hedged item and thehedging instrument.
(1) Accounting treatment policy of trust
beneficiary interests in real estate
As to trust beneficiary interests in realestate, all accounts of assets and liabilities
within assets in trust, as well as all income
generated and expenses incurred fromassets in trust, are recorded in the relevantbalance sheets and income statement
accounts. Of such items, the following
significant trust assets and liabilities areshown separately on the balance sheet.
(a) Cash and bank deposits in trust(b) Buildings in trust
Buildings and accompanying facilities
in trust(d) Method of evaluating hedge effectivenessHedge effectiveness is evaluated bycomparing the cumulative amount ofchanges in cash flows of the hedging
instrument and the cumulative amount ofchanges in cash flows of the hedged item
and verifying the difference in the amountsof change of both the hedged item and thehedging instrument.
(1) Accounting treatment policy of trust
beneficiary interests in real estate
As to trust beneficiary interests in realestate, all accounts of assets and liabilities
within assets in trust, as well as all income
generated and expenses incurred fromassets in trust, are recorded in the relevantbalance sheets and income statement
accounts. Of such items, the following
significant trust assets and liabilities areshown separately on the balance sheet.
(a) Cash and bank deposits in trust(b) Buildings in trust
Buildings and accompanying facilities
in trust- 75 -

Fiscal period ended
December 31, 2019(from July 1, 2019 to
December 31, 2019)
amount assessed and determined, the amountcorresponding 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 amountequivalent to property taxes is capitalized aspart of the acquisition cost of the real estate
instead of being charged as expense. The
amount equivalent to property taxes that was
included as part of the acquisition of real estate
during the fiscal period ended December 31,
2019 is JPY 111,155 thousand.

By Period
Item(Reference)
Fiscal period ended
June 30, 2019(from January 1, 2019 toJune 30, 2019)
Structures in trust
Tools, furniture and fixtures in trust
Land in trust
Construction in progress in trust(c) Leasehold rights in trust(d) Tenant leasehold and security deposits
in trust(2) Accounting treatment of consumption taxes
Transactions subject to consumption taxes
are recorded at amounts exclusive ofconsumption taxes.

Fiscal period ended
December 31, 2019(from July 1, 2019 to
December 31, 2019)
Structures in trust
Tools, furniture and fixtures in trust
Land in trust
Construction in progress in trust(c) Leasehold rights in trust(d) Tenant leasehold and security deposits
in trust(2) Accounting treatment of consumption taxes
Transactions subject to consumption taxes
are recorded at amounts exclusive ofconsumption taxes.

[Notes to the Balance Sheet](Reference) Fiscal period ended June 30, 2019
Fiscal period ended December 31, 2019(as of June 30, 2019)(as of December 31, 2019)*1. Minimum net assets as required by Article 67, Paragraph *1. Minimum net assets as required by Article 67, Paragraph
4 of the Act on Investment Trusts and Investment
4 of the Act on Investment Trusts and Investment
Corporations
Corporations
JPY 50,000 thousand
JPY 50,000 thousand*2. Allowance for temporary differences adjustment(Reference) Fiscal period ended June 30, 2019 (from January 1, 2019 to June 30, 2019)
1. Reasons, related assets and amounts(Unit: JPY thousand)Allowance
Balance at theReversal
Related assets,
set aside
Balance at theReasonInitial amount
beginning ofduringetc.
duringend of period
periodperiodperiodLeaseholdAmortization of(131,332)(46,329)(85,002)(131,332)
rights in trust leasehold rights(131,332)

Total(46,329)(85,002)-(131,332)

2. Method of reversal(1) Leasehold rights in trust
The corresponding amount is scheduled to be reversed upon sale of the relevant properties, etc.
Fiscal period ended December 31, 2019 (from July 1, 2019 to December 31, 2019)
1. Reasons, related assets and amounts(Unit: JPY thousand)Allowance
set aside
duringperiodReversalduringperiodBalance at theend of period-

125,201(6,130)(131,332)(131,332)- 125,201
Total
2. Method of reversal(1) Leasehold rights in trust
The corresponding amount is scheduled to be reversed upon sale of the relevant properties, etc.
*3. Reduction entry amount of property and equipment Not applicable.
acquired with governmental subsidies, etc.
Building and accompanying facilities in trust
JPY 115,319 thousand(6,130)Related assets,
etc.

ReasonLeaseholdrights in trust

Sale of asset withleasehold rights
in trust

Balance at the
beginning of
periodInitial amount(131,332)- 76 -(131,332)

[Notes to Statement of Income and Retained Earnings](Reference) Fiscal period ended June 30, 2019(from January 1, 2019 to June 30, 2019)

Fiscal period ended December 31, 2019(from July 1, 2019 to December 31, 2019)*1. Real estate rental revenues and expenses(Unit: JPY thousand)
A. Real estate rental revenues*1. Real estate rental revenues and expenses(Unit: JPY thousand)
A. Real estate rental revenues

Rental revenue – real estate

Rental revenue – real estate(Rent/common area charges) (Note)

11,795,812(Rent/common area charges) (Note)

357,587(Other revenues)

14,545,826

Total

B. Real estate rental expenses

B. Real estate rental expenses

Property-related expenses

Property-related expenses(Maintenance costs)

662,160(Maintenance costs)

539,778(Taxes and public dues)

565,715(Taxes and public dues)

631,040(Insurance expenses)

13,723(Insurance expenses)

17,639(Depreciation expenses)

3,048,495(Depreciation expenses)

3,345,473

200,561(Other expenses)

C. Real estate rental income

C. Real estate rental income(Note) Of which, revenue from variable
4,304,181
hotel rents*2. Management contract revenue and expenses(Unit: JPY thousand)Hotel operating revenue
Hotel operating expenses
Management contract revenue (A-B)
Management contract expenses
Management fee
Non-life insurance expenses
Depreciation expenses
Other expenses
Total
Management contract revenue andexpenses (C-D)

4,673,007

Total

7,662,741

(A-B)

A.
B.
C.
D.

139,076(Other expenses)

4,490,658

Total

E.

239,092(Other revenues)

12,153,399

Total

14,306,734

1,406,749
826,160
580,5883,490
36,279
119,824
4,782
164,376
416,211*3. Gain on sales of properties

9,872,819(A-B)(Note) Of which, revenue from variable
5,317,963
hotel rents*2. Management contract revenue and expenses(Unit: JPY thousand)
A.
B.
C.
D.

Hotel operating revenue
Hotel operating expenses
Management contract revenue (A-B)
Management contract expenses
Management fee
Non-life insurance expenses
Depreciation expenses
Other expenses
Total
E.

Management contract revenue andexpenses (C-D)

3,927,961
2,530,339
1,397,621
12,276111,278
412,305
1,680
537,542860,079*3. Gain on sales of properties(Unit: JPY thousand)Spacia Ebisu(Unit: JPY thousand)Winbell Kagurazaka

Proceeds from sales of properties

12,209,814

Proceeds from sales of properties

5,135,530

Cost of sales of properties

6,422,775

Cost of sales of properties

2,992,380

Other expenses on sales of properties
Gain on sales of properties

153,225
5,633,813- 77 -

Other expenses on sales of properties
Gain on sales of properties

172,843
1,970,306

(Reference) Fiscal period ended June 30, 2019(from January 1, 2019 to June 30, 2019)

Fiscal period ended December 31, 2019(from July 1, 2019 to December 31, 2019)

Royal Parks Tower Minami-Senju
Proceeds from sales of properties

27,745,250

Cost of sales of properties

21,923,169

Other expenses on sales of properties
Gain on sales of properties

337,910
5,484,169[Notes to Statement of Changes in Net Assets](Reference) Fiscal period ended June 30, 2019(from January 1, 2019 to June 30, 2019)

Fiscal period ended December 31, 2019(from July 1, 2019 to December 31, 2019)

Total number of issuable investment units and number ofinvestment units issued and outstanding

Total number of issuable investment units and number ofinvestment units issued and outstanding

Total number of investment units authorized 10,000,000 units 10,000,000
Total number
unitsof investment units authorized 10,000,000 units
Total number of investment units issued
and outstanding

Total number of investment units issued
5,666,840 units 4,793,181 units
and outstanding- 78 -

6,096,840 units

[Notes Related to Tax Accounting](Reference) Fiscal period ended June 30, 2019(from January 1, 2019 to June 30, 2019)

Fiscal period ended December 31, 2019(from July 1, 2019 to December 31, 2019)

1. Significant components of deferred tax assets and liabilities(Unit: JPY thousand)(Deferred tax assets)
Enterprise tax payable
1,294

1. Significant components of deferred tax assets and liabilities(Unit: JPY thousand)(Deferred tax assets)
Enterprise tax payable
821

Allowance for doubtful accounts

Allowance for doubtful accounts

46-

Buildings and other (merger)

428,965

Buildings and other (merger)

375,803

Land (merger)

786,792

Land (merger)

695,171

Loss carried forward (Note 1)

747,198

Loss carried forward (Note 1)

522,444

Asset retirement obligations

10,168Asset retirement obligations

10,237

Amortization of leasehold right
Adjustment of acquisition prices(overseas properties)
Subtotal
Valuation allowance for tax loss
carried forward
Valuation allowance for the total of
deductible temporary differences,
etc.
Subtotal

76,182

Amortization of leasehold right
Adjustment of acquisition prices(overseas properties)
Deposit received

88,526477,2132,527,862(747,198)(1,743,389)(2,490,588)

Total

37,274(Deferred tax liabilities)
Removal expenses included in asset
retirement obligations
Deferred gains or losses on hedges

27,562

Total

37,274

9,711

Tax loss carriedforward (a)Valuation
allowance
Deferred tax
assets-Due after
one to twoyears

Due after
two tothree years

78,982-

Due after
three tofour years(522,444)(1,652,225)(2,174,669)

Due after
one to twoyears

Due after
two tothree years

Due after
three tofour years--

201,976

320,467--(201,976)(320,467)

-

-

-

-

four to fiveDue after
five years

Total

years

-

(668,215)

-

-

-

-

Due after

Tax loss carriedforward (a)Valuation
allowance
Deferred tax
assets--522,444--(522,444)---(a) Tax loss carried forward is multiplied by statutory tax rate.

Total

years
Tax loss carriedforward (a)Valuation
allowance
Deferred tax
assets2,174,669

Duewithinone yearTax loss carriedforward (a)Valuation
allowance
Deferred tax
assets668,215(78,982)

Due after
five years

Subtotal
Valuation allowance for tax loss
carried forward
Valuation allowance for the total of
deductible temporary differences,
etc.
Subtotal

Due after-

four to five

9,301

Total
(Note 1) The amounts of tax loss carried forward and thedeferred tax assets by carry-forward period are as
follows.
(Unit: JPY thousand)(Deferred tax assets, net)
(Note 1) The amounts of tax loss carried forward and thedeferred tax assets by carry-forward period are as
follows.
(Unit: JPY thousand)Duewithinone year472,363--

747,198--(747,198)---(a) Tax loss carried forward is multiplied by statutory tax rate.
(Note 2) Valuation allowance decreased by JPY
6,700,432,000. The main factor for the decrease is use of
tax loss carried forward- 79 -

(Reference) Fiscal period ended June 30, 2019(from January 1, 2019 to June 30, 2019)

Fiscal period ended December 31, 2019(from July 1, 2019 to December 31, 2019)

2. Significant difference between statutory tax rate and theeffective tax rate
Statutory tax rate
31.51%

2. Significant difference between statutory tax rate and theeffective tax rate
31.74%
Statutory
31.74%
tax rate
31.51%

31.7

Changes in valuation allowance(31.58)%(31.71)%
Deductible(32.06)%
cash distributions(28.47)%(32.0

Changes of tax rate

(0.05)%(0.09)%
Changes(0.32)%
in valuation allowance(3.03)%(0.3

Others0.12%

Others 0.65%

0.08%

0.00%

0.6

Effective tax rate

0.00%

Effective0.01%
tax rate

0.01%

0.01%

0.0

[Notes Related to Financial Instruments](Reference) Fiscal period ended June 30, 2019(from January 1, 2019 to June 30, 2019)

Fiscal period ended December 31, 2019(from July 1, 2019 to December 31, 2019)

1. Status of financial instruments

1. Status of financial instruments(1) Policy for financial instruments(1) Policy for financial instruments

INV principally conducts its operations throughinvestments 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, investment corporation bonds, orborrowing loans.
Derivative transactions are to be entered into for the
purpose of hedging against the risks of future interest rate
fluctuations, exchange rate fluctuations, etc. and not for
speculation.
Surplus funds are managed after carefully taking into
account safety, liquidity, the interest rate environment andfinancing.
(2) Nature and extent of risks arising from financial
instruments and risk management.

INV principally conducts its operations throughinvestments 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, investment corporation bonds, orborrowing loans.
Derivative transactions are to be entered into for the
purpose of hedging against the risks of future interest rate
fluctuations, exchange rate fluctuations, etc. and not for
speculation.
Surplus funds are managed after carefully taking into
account safety, liquidity, the interest rate environment andfinancing.
(2) Nature and extent of risks arising from financial
instruments and risk management.

The funds raised through borrowings and issuinginvestment corporation bonds are mainly used to acquire
real estate properties or trust beneficiary interest in realestate (including related acquisition costs) and for therefinancing of existing loans. Liquidity risks relating toloan are managed by the finance department of the AssetManager by preparing and updating plans for funds, andmonitoring the covenants 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 not available, fair value is determined through areasonable estimate. Since certain assumptions, etc. areused in estimating the fair value, different assumptions,etc. may result in the variance of such value.

- 80 -

The funds raised through borrowings and issuinginvestment corporation bonds are mainly used to acquire
real estate properties or trust beneficiary interest in realestate (including related acquisition costs) and for therefinancing of existing loans. Liquidity risks relating toloan are managed by the finance department of the AssetManager by preparing and updating plans for funds, andmonitoring the covenants 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 not available, fair value is determined through areasonable estimate. Since certain assumptions, etc. areused in estimating the fair value, different assumptions,etc. may result in the variance of such value.

(Reference) Fiscal period ended June 30, 2019(from January 1, 2019 to June 30, 2019)

Fiscal period ended December 31, 2019(from July 1, 2019 to December 31, 2019)

2. Estimated fair value of financial instruments.
Book value, fair value and the difference between value asof June 30, 2019 are as follows.
(Unit: JPY thousand)2. Estimated fair value of financial instruments.
Book value, fair value and the difference between value asof December 31, 2019 are as follows.
(Unit: JPY thousand)Book Value(1) Cash and bankdeposits(2) Cash and bankdeposits in trust
Total assets

Fair Value

Difference

48,833,358

48,833,358―

6,766,348

6,766,348―

55,599,707

55,599,707

―

(―)

(―)

―

(51,744,000)(51,744,000)―(5,300)(3) Short-term loans(4) Current portion of
long-term loans
payable(5) Investment
corporation bonds(6) Long-term loans(4,000,000)(4,005,300)(173,030,000)(173,030,000)―

Total liabilities(228,774,000)(228,779,300)(5,300)179,861

179,861―(7) Derivatives(1) Cash and bankdeposits(2) Cash and bankdeposits in trust
Total assets

Book Value

Fair Value

Difference

17,924,733

17,924,733-

10,862,669

10,862,669-

28,787,403

28,787,403-(2,686,000)(2,686,000)-(50,130,000)(50,130,000)

42,700(3) Short-term loans(4) Current portion of
long-term loans
payable(5) Investment
corporation bonds(6) Long-term loans(7,000,000)(6,957,300)(199,358,000)(199,358,000)-

Total liabilities(259,174,000)(259,131,300)

42,700129,227

129,227-(7) Derivatives(*1) Items recorded in the Liabilities Section are shown inparenthesis.

(*1) Items recorded in the Liabilities Section are shown inparenthesis.

(*2) Receivables and payables arising from derivativetransactions are recorded in net amounts, and if the total
net amount is a negative amount, such amount is shownin parenthesis.

(*2) Receivables and payables arising from derivativetransactions are recorded in net amounts, and if the total
net amount is a negative amount, such amount is shownin parenthesis.

(Note 1) Methods to calculate fair value of financial(Note 1) Methods to calculate fair value of financial
instruments.
instruments.
(1) Cash and bank deposits (2) Cash and bank deposits in trust (1) Cash and bank deposits (2) Cash and bank deposits in trust(3) Short-term loans(3) Short-term loans
Due to the short maturities, the book value of these instruments Due to the short maturities, the book value of these instruments
is deemed a reasonable approximation of the fair value, and is deemed a reasonable approximation of the fair value, andtherefore, the book value is used as the fair value.
therefore, the book value is used as the fair value.
(4) Current portion of long-term loans payable (6) Long-termloansLong-term loans with floating interest rates reflecting changes
in market rates within a short-term period is stated at their bookvalue as their book value approximate their fair value.

(4) Current portion of long-term loans payable (6) Long-termloansLong-term loans with floating interest rates reflecting changes
in market rates within a short-term period is stated at their bookvalue as their book value approximate their fair value.

(5) Investment corporation bonds
Fair value is calculated using a method based on market price.

(5) Investment corporation bonds
Fair value is calculated using a method based on market price.

(7) Derivatives(a) Derivatives transactions to which hedge accounting is
not applied
Not applicable(b) Derivatives transactions to which hedge accounting isappliedThe contract amount as of the closing date undereach hedge-accounting method and the amountequivalent to the notional principal prescribed in thecontracts are as shown below.

(7) Derivatives(a) Derivatives transactions to which hedge accounting is
not applied
Not applicable(b) Derivatives transactions to which hedge accounting isappliedThe contract amount as of the closing date undereach hedge-accounting method and the amountequivalent to the notional principal prescribed in thecontracts are as shown below.

- 81 -

(Reference) Fiscal period ended June 30, 2019(from January 1, 2019 to June 30, 2019)

Fiscal period ended December 31, 2019(from July 1, 2019 to December 31, 2019)(Unit: JPY thousand)
Method of Derivativehedge

transaction

accounting

type, etc.

Primary

Contract amount, etc.

Fair value

(*1)

(*2)

hedged item

(Unit: JPY thousand)
Method of Derivative

Amount due

hedgetransaction

after

accounting

type, etc.

Primary

Contract amount, etc.

Fair value

(*1)

(*2)

Amount due

hedged item

after

one year

one yearInterest rate

swap

Receive

Receivefloating

Principle
accounting
methodInterest rate

swap
Borrowings

84,074,000

51,413,000(19,845)

floating

rate/payrate/pay

fixed rate

fixed rate

Currency

Currency

option5,134,140transaction
USD/Call(Optionfees)
Currency
optiontransaction

1,933,140

Principle
accounting
methodScheduledforeign(133,171)(42,806)(33,916)

currencytransactions

5,134,140(Optionfees)

USD/Call(Optionfees)

transaction

USD/Put

3,836,140

622,160(95,963)(13,687)

3,836,140

622,160(191,665)(38,743)

optionoption1,933,140

66,133,000transaction

Currency

denominatedBorrowings 95,112,000

64,609

Scheduledforeign(24,788)

currencydenominatedtransactions

USD/Put(225,420)(102,873)(233,622)(Optionfees)(89,405)(*1) The contract amount, etc. for interest rate swap arestated based on a notional principal.
(*2) Estimation method for fair value(*1) The contract amount, etc. for interest rate swap arestated based on a notional principal.
(*2) Estimation method for fair value

Interest rate swap:
Estimated based on the price, etc. presented by thecorrespondent financial institutions.

Interest rate swap:
Estimated based on the price, etc. presented by thecorrespondent financial institutions.

Currency option:
Indicates fair values of option fees, etc. presented by
the correspondent financial institutions.

Currency option:
Indicates fair values of option fees, etc. presented by
the correspondent financial institutions.

(Note 2) Financial instruments for which fair value isextremely difficult to value.
Category
Tenant leasehold andsecurity deposits in trust
Investment securities(Note 2) Financial instruments for which fair value isextremely difficult to value.

(Unit: JPY thousand)Book value
1,746,941
17,856,387

Category
Tenant leasehold andsecurity deposits in trust
Investment securities(Unit: JPY thousand)Book value
1,765,094
17,856,387

Tenant leasehold and security deposits in trust have noobservable market price, and it is impracticable to estimate
reasonably their future cash flows because the repayment
dates of those deposits and the timing of the lessee’s exitfrom the property are not certain. Thus, their fair value is
not disclosed.

Tenant leasehold and security deposits in trust have noobservable market price, and it is impracticable to estimate
reasonably their future cash flows because the repayment
dates of those deposits and the timing of the lessee’s exitfrom the property are not certain. Thus, their fair value is
not disclosed.

Since quoted market prices are not available for investment
securities (preferred equity interest and TK interest), fairvalue is deemed extremely difficult to value. Thus, prices
are not subject to the disclosure of fair value.

Since quoted market prices are not available for investment
securities (preferred equity interest), fair value is deemed
extremely difficult to value. Thus, prices are not subject tothe disclosure of fair value.

- 82 -

(Reference) Fiscal period ended June 30, 2019(from January 1, 2019 to June 30, 2019)

Fiscal period ended December 31, 2019(from July 1, 2019 to December 31, 2019)(Note 3) Remaining schedule of monetary claims after theclosing date of the fiscal period(Note 3) Remaining schedule of monetary claims after theclosing date of the fiscal period

As of June 30, 2019

As of December 31, 2019
(Unit: JPY thousand)Cash and bank deposits

Due within
one year

Due after one Due after two
to two years to three years

48,833,358-

Cash and bank deposits intrust

6,766,348

Total

55,599,707(Unit: JPY thousand)-Cash and bank deposits in
trust

-

Total

-

Due after one Due after two
to two years to three years-

Cash and bank deposits

17,924,733

-

-

-

-

Cash and bank deposits in
trust

10,862,669

-

-

-

-

Total

28,787,403--

Due after three Due after four Due after five
to four years to five years
years
Cash and bank deposits

Due within
one year

Due after three Due after four Due after five
to four years to five years
years

-

Cash and bank deposits

-

-

-

-

-

Cash and bank deposits in
trust

-

-

-

-

-

Total

-

-

-

-

(Note 4) Repayment schedule of long-term loans and otherinterest-bearing debts after the closing date of the
fiscal period(Note 4) Repayment schedule of long-term loans and otherinterest-bearing debts after the closing date of the
fiscal period

As of June 30, 2019

As of December 31, 2019
(Unit: JPY thousand)(Unit: JPY thousand)Due within Due after one to Due after two
one year
two years to three years---

51,744,000

-

-

-

-

-

Long-term loans-

57,380,000

52,602,000

Total

51,744,000

57,380,000

52,602,000

Short-term loans
Current portion of longterm loans payable
Investment corporationbonds

Due within
one year
2,686,000--

50,130,000

-

-

-

-

-

Long-term loans-

55,601,000

47,079,000

Total

52,816,000

55,601,000

47,079,000

Short-term loans
Current portion of longterm loans payable
Investment corporationbonds

Due after three Due after four Due after five
to four years to five years
years
-

-

-

-

-

-

1,000,000

2,000,000

1,000,000

Long-term loans

29,645,000

28,843,000

4,560,000

Total

30,645,000

30,843,000

5,560,000

Short-term loans
Current portion of longterm loans payable
Investment corporationbonds- 83 -

Due after one Due after two
to two years to three years

Due after three Due after four Due after five
to four years to five years
years
-

-

-

-

-

-

3,000,000

1,000,000

3,000,000

Long-term loans

38,582,000

32,920,000

25,176,000

Total

41,582,000

33,920,000

28,176,000

Short-term loans
Current portion of longterm loans payable
Investment corporationbonds

[Notes Related to Asset Retirement Obligations](Reference) Fiscal period ended June 30, 2019(from January 1, 2019 to June 30, 2019)

Fiscal period ended December 31, 2019(from July 1, 2019 to December 31, 2019)

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 theperiodThe amount of the asset retirement obligations has been
calculated by fixing the estimated period of use at 43 years,
based on the period until the expiration of the fixed-term
land lease agreement, and by using a discount rate of
1.342%.
3. Increase/decrease in the total amount of asset retirement
obligations for the period(Unit: JPY thousand)

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 theperiodThe amount of the asset retirement obligations has been
calculated by fixing the estimated period of use at 43 years,
based on the period until the expiration of the fixed-term
land lease agreement, and by using a discount rate of
1.342%.
3. Increase/decrease in the total amount of asset retirement
obligations for the period(Unit: JPY thousand)

Balance at the beginning of the period
Increase due to the acquisition of properties
Accretion expense
Balance at the end of the period

32,107213
32,321- 84 -

Balance at the beginning of the period
Increase due to the acquisition of properties
Accretion expense
Balance at the end of the period

32,321
218
32,539[Notes Related to Rental Properties](Reference) Fiscal period ended June 30, 2019(from January 1, 2019 to June 30, 2019)

Fiscal period ended December 31, 2019(from July 1, 2019 to December 31, 2019)

INV owns residential properties and hotels as core assets
principally in the Greater Tokyo area and major regional
cities with an aim to establish a portfolio focusing on bothstability and growth potential. The book value changed
during the period and balance at the end of the period are
as follows.

INV owns residential properties and hotels as core assets
principally in the Greater Tokyo area and major regional
cities with an aim to establish a portfolio focusing on bothstability and growth potential. The book value changed
during the period and balance at the end of the period are
as follows.

(Unit: JPY thousand)(Unit: JPY thousand)Book value
Fair value atBalance at theBalance at the the end of the
Change during
periodbeginning of
end of thethe period
the period
periodUse

Residences

85,908,280(28,986,463)

72,197,000

Residences

56,921,817(3,368,841)

53,552,976

69,671,000

4,825,236

6,140,000

Commercial
facilities

4,825,236(35,280)

4,789,956

6,150,000

34,680,926

326,555,836

393,926,158

Hotels326,555,836

80,684,352

407,240,188

482,093,260

5,652,960

388,302,890

472,263,158

Total

388,302,890

77,280,230

465,583,121

557,914,260

Commercial
facilities

4,866,739(41,503)

Hotels291,874,909

Total

382,649,930

56,921,817

Book value
Fair value atBalance at theBalance at the the end of the
Change during
periodbeginning of
end of thethe period
the period
periodUse(Note 1) Book value is the figure calculated by subtracting
amount of accumulated depreciation fromacquisition price (including acquisition-related
costs).
(Note 2) The major factors for the increase for the fiscal
period ended June 30, 2019, were the change ininvestment structure for overseas assets and capital
expenditure-related construction work.
(Note 3) The major factors of the decrease were sale ofresidential properties and recording of depreciation.
(Note 4) The fair value as of the end of June 30, 2019 isbased on the appraisal value or survey value
provided by Asset Research and Development Inc.,
Japan Real Estate Institute, JLL Morii Valuation &Advisory K.K., The Tanizawa Sogo Appraisal Co.,
Ltd., Daiwa Real Estate Appraisal Co., Ltd. and
CBRE, Inc.

For information related to profits and losses from rental
properties in the fiscal period ended June 30, 2019, pleaserefer to “Notes to Statement of Income and Retained
Earnings.”(Note 1) Book value is the figure calculated by subtracting
amount of accumulated depreciation fromacquisition price (including acquisition-related
costs).
(Note 2) The major factors for the increase for the fiscal
period ended December 31, 2019, were acquisitionof hotels and construction work related to capital
expenditures.
(Note 3) The major factors of decrease were sale ofresidential properties and depreciation.
(Note 4) The fair value as of the end of the reporting period isdetermined based on the appraisal value or survey
value provided by Asset Research and Development
Inc., Japan Real Estate Institute, JLL Morii
Valuation & Advisory K.K., Tanizawa Sogo
Appraisal Co., Ltd., Daiwa Real Estate Appraisal
Co., Ltd. and CBRE, Inc. However, the sale priceis deemed the fair value of City House Tokyo
Shinbashi, for which the purchase and saleagreement was entered into on December 9, 2019.
For information related to profits and losses from rental
properties in the fiscal period ended December 31, 2019,
please refer to “Notes to Statement of Income and Retained
Earnings.”[Notes Related to Restriction on Asset Management](Reference) Fiscal period ended June 30, 2019(from January 1, 2019 to June 30, 2019)

Fiscal period ended December 31, 2019(from July 1, 2019 to December 31, 2019)

Not applicable.

Not applicable.

- 85 -

[Notes Related to Transactions with Related Parties]
Fiscal period ended June 30, 2019 (from January 1, 2019 to June 30, 2019) (Reference)
1

Interested parties of the Asset Manager
NameClassification

Naqua Hotel &Resorts Management
Co., Ltd.
(Note 2)MyStays HotelManagement
Co., Ltd.
(Note 2)Business or
occupation

Percentage ofinvestment
units owned(%)

Type of transaction

Transaction
amount(JPY thousand)(Note 1)

Account

Balance at theend of the period(JPY thousand)(Note 1)Hotelbusiness-

Rental revenues

590,306

Accounts
receivable

197,253

Hotelbusiness-

Rental revenues

6,581,126

Accounts
receivable

1,834,677(Note 1) Consumption taxes, etc., are not included in transaction amounts, but are included in the balance at the end of the period.
(Note 2) Naqua Hotel & Resorts Management Co., Ltd. and MyStays Hotel Management Co., Ltd. have no capital relationshipto be disclosed with the Asset Manager. However, this tenant and operator have received an anonymous partnershipinvestment or investment through funds that are managed by affiliates of FIG (a subsidiary of SoftBank Group Corp.,
a parent company of the Asset Manager directly/indirectly owning 100% of its issued shares). Accordingly, INV
treats Naqua Hotel & Resorts Management Co., Ltd. and MyStays Hotel Management Co., Ltd. as the equivalent tointerested parties.

2

Asset Custody Company
Classification

Asset CustodyCompany

Name

Sumitomo Mitsui
Trust Bank,
LimitedBusiness or
occupation

Banking andtrust business

Percentage ofinvestment
units owned(%)

Type of transaction

Transaction
amount(JPY thousand)(Note 1)

Repayment ofshort-term loan
Borrowing of
long-term loan
Repayment oflong-term loan

5,500,000

Finance-related fees
(Note 2)

36,465Interest expenses(Note 2)-

Account

Balance at theend of the period(JPY thousand)(Note 1)

Short-termloans payable-

Long-termloans payable

26,895,000

Prepaid expenses

53,939Long-term
prepaid expenses

76,95974,293 Accrued expenses

1,236

-

5,581,000(Note 1) Consumption taxes, etc., are not included in transaction amounts, but are included in the balance at the end of the period.
(Note 2) The terms and conditions have been determined based on actual market conditions.

- 86 -

Fiscal period ended December 31, 2019 (from July 1, 2019 to December 31, 2019)1

Interested parties of the Asset Manager

Classification

Name

Business or occupation

Shirahama Tokutei
Investment
Mokuteki Kaisha
management business(Note 3)

Interested
party of the
Asset
Manager(Note 1)
(Note 2)
(Note 3)(Note 4)

Percentage ofvoting rights
owned
(%)

Type of transaction

Transaction
amount(JPY thousand)(Note 1)

Account

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

Purchase of trust beneficiaryinterests in real estate(Note 2)
(Note 4)

22,322,000--

Touyako Godo
Kaisha(Note 3)

Investment
management business-

Purchase of trust beneficiaryinterests in real estate(Note 2)
(Note 4)

15,543,000--

Calvis Tokutei
Mokuteki Kaisha(Note 3)

Investment
management business-

Purchase of trust beneficiaryinterests in real estate(Note 2)
(Note 4)

11,492,000--

Yaeyama Resort
Hotel Tokutei
Mokuteki Kaisha(Note 3)

Investment
management business-

Purchase of trust beneficiaryinterests in real estate(Note 2)
(Note 4)

9,731,000--

Saturnia Tokutei
Mokuteki Kaisha(Note 3)

Investment
management business-

Purchase of trust beneficiaryinterests in real estate(Note 2)
(Note 4)

9,405,000--

Kawaguchiko
Tokutei Mokuteki
Kaisha(Note 3)

Investment
management business-

Purchase of trust beneficiaryinterests in real estate(Note 2)
(Note 4)

8,629,000--

HL Investments 2
Tokutei Mokuteki
Kaisha(Note 3)

Investment
management business-

Purchase of trust beneficiaryinterests in real estate(Note 2)
(Note 4)

5,524,000--

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

Rental revenues

1,133,572

Accounts
receivable

195,942

MyStays HotelManagement Co.,
Ltd.
(Note 3)Hotelbusiness-

Rental revenues

8,084,924

Accounts
receivable

2,664,336

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 withsponsor related parties.
Shirahama Tokutei Mokuteki Kaisha, Touyako Godo Kaisha, Calvis Tokutei Mokuteki Kaisha, Yaeyama Resort Hotel Tokutei Mokuteki
Kaisha, Saturnia Tokutei Mokuteki Kaisha, Kawaguchiko Tokutei Mokuteki Kaisha, HL Investments 2 Tokutei Mokuteki Kaisha, Naqua
Hotel & Resorts Management Co., Ltd. and MyStays Hotel Management Co., Ltd. have no capital relationship to be disclosed with theAsset Manager. However, these Tokutei Mokuteki Kaisha or the tenant and operator have received an anonymous partnershipinvestment or investment through funds that are managed by affiliates of FIG (a subsidiary of SoftBank Group Corp., which is a parent
company of the Asset Manager directly/indirectly owning 100% of its issued shares). Accordingly, INV treats Shirahama Tokutei
Mokuteki Kaisha, Touyako Godo Kaisha, Calvis Tokutei Mokuteki Kaisha, Yaeyama Resort Hotel Tokutei Mokuteki Kaisha, Saturnia
Tokutei Mokuteki Kaisha, Kawaguchiko Tokutei Mokuteki Kaisha, HL Investments 2 Tokutei Mokuteki Kaisha, Naqua Hotel & Resorts
Management Co., Ltd. and MyStays Hotel Management Co., Ltd. as the equivalent to interested parties.
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 not included.

- 87 -

Property
NumberName of Property

Counterparty

Purchase Price(JPY thousand)

D64

Hotel MyStays Sapporo Aspen

Touyako Godo Kaisha

15,543,000

D65

Art Hotel Ishigakijima

Yaeyama Resort Hotel Tokutei Mokuteki Kaisha

9,731,000

D66

Hotel MyStays Fuji Onsen Resort

Saturnia Tokutei Mokuteki Kaisha

9,405,000

D67

Hotel Sonia Otaru

Shirahama Tokutei Mokuteki Kaisha

5,930,000

D68

Hotel MyStays Kanazawa Castle

Calvis Tokutei Mokuteki Kaisha

5,682,000

D69

Art Hotel Niigata Station

HL Investments 2 Tokutei Mokuteki Kaisha

5,524,000

D70

Hotel MyStays Nagoya Nishiki

Shirahama Tokutei Mokuteki Kaisha

5,197,000

D71

Hotel Nord Otaru

Shirahama Tokutei Mokuteki Kaisha

4,296,000

D72

Hotel MyStays Kagoshima Tenmonkan

Kawaguchiko Tokutei Mokuteki Kaisha

3,445,000

D73

Art Hotel Asahikawa

Shirahama Tokutei Mokuteki Kaisha

3,197,000

D74

Hotel MyStays Matsuyama

Calvis Tokutei Mokuteki Kaisha

3,098,000

D75

Hotel MyStays Sapporo Susukino

Kawaguchiko Tokutei Mokuteki Kaisha

3,059,000

D76

Hotel MyStays Sapporo Nakajima Park

Shirahama Tokutei Mokuteki Kaisha

2,118,000

D77

Hotel MyStays Sapporo Nakajima Park Annex

Shirahama Tokutei Mokuteki Kaisha

1,584,000

D78

Flexstay Inn Sakuragicho

Calvis Tokutei Mokuteki Kaisha

1,425,000

D79

MyCUBE by MYSTAYS Asakusa Kuramae

Calvis Tokutei Mokuteki Kaisha

1,287,000

D80

Hotel MyStays Kagoshima Tenmonkan Annex

Kawaguchiko Tokutei Mokuteki Kaisha

1,168,000

D81

Hotel MyStays Nayoro

Kawaguchiko Tokutei Mokuteki Kaisha

957,000

Total

282,646,000

Asset Custody Company
Classification

Asset CustodyCompany

Name

Sumitomo Mitsui
Trust Bank,
LimitedBusiness or
occupation

Banking andtrust business

Percentage ofinvestment
units owned(%)

Type of transaction

Transaction
amount(JPY thousand)(Note 1)

Repayment ofshort-term loan
Borrowing of
long-term loan
Repayment oflong-term loan

6,563,000

Finance-related fees
(Note 2)

72,555Interest expenses(Note 2)-

Account

Balance at theend of the period(JPY thousand)(Note 1)

Short-termloans payable

672,000

Long-termloans payable

30,788,000

Prepaid expenses

64,169Long-term
prepaid expenses

105,877

87,503 Accrued expenses

959

672,000

2,670,000(Note 1) Consumption taxes, etc., are not included in transaction amounts, but are included in the balance at the end of the period.
(Note 2) The terms and conditions have been determined based on actual market conditions.

- 88 -

[Notes Related to Per Unit Information](Reference) Fiscal period ended June 30, 2019(from January 1, 2019 to June 30, 2019)

Fiscal period ended December 31, 2019(from July 1, 2019 to December 31, 2019)

Net assets per unit

JPY 41,125

Net assets
JPYper
39,063unit

JPY 42,601

Net income per unit

JPY 3,748

Net income
JPY per
1,504
unit

JPY 1,910

Net income per unit is calculated by dividing net income forthe 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.

Net income per unit is calculated by dividing net income forthe 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.
(Reference) Fiscal period ended June 30, 2019(from January 1, 2019 to June 30, 2019)

Fiscal period ended December 31, 2019(from July 1, 2019 to December 31, 2019)

Net income for the period (JPY thousand)
21,239,877
Amounts not attributable to common unitholders(JPY thousand)Net income attributable to common units
21,239,877(JPY thousand)Average number of investment units during the5,666,840
period (units)

8,384,071
Net income4,702,073
for the period
5,431,003(JPY thousand)
4,363,420
Amounts not attributable to common unitholders(JPY thousand)Net income attributable to common units
8,384,071 4,702,073 5,431,003
4,363,420(JPY thousand)Average number of investment units during the
5,575,457 3,788,254 3,675,824
3,436,572
period (units)- 89 -

2,952,688
11,638,948- 2,952,688
11,638,948
3,149,936
6,093,427

[Notes Related to Significant Subsequent Events](Reference) Fiscal period ended June 30, 2019(from January 1, 2019 to June 30, 2019)

Fiscal period ended December 31, 2019(from July 1, 2019 to December 31, 2019)

1. Issuance of new investment units
INV resolved at its meetings of the Board of Directors
held on July 1, 2019, and July 10, 2019, respectively, toconduct the issuance of new investment units andsecondary offering of investment units. Payment for the
new investment units issued through public offering wascompleted on July 18, 2019, in accordance with thefollowing terms and conditions. In addition, with respect
to the issuance of new investment units through the thirdparty allotment in connection with the over-allotment
secondary offering, the payment was completed on August
15, 2019. As a result, the unitholders’ capital of INV is
JPY 235,576 million and the number of investment units
issued and outstanding of INV increased to 6,096,840.

1. Sale of asset (property)
INV completed the sale of the following property on
January 15, 2020.

(1) Issuance of new investment units through public
offering
Number of investment units
offeredOf whichdomestic public offering
overseas offering
Issue price(Total offer price)
Total issue price(offer price)
Paid amount (issue value)
Total paid amount(total issue value)
Payment date:

409,524 investment units:::

194,524 investment units
215,000 investment units
JPY 58,898 per unit
JPY 24,120,144,552::

JPY 56,939 per unit
JPY 23,317,887,036:

July 18, 2019(2) Secondary offering of investment units (overallotment secondary offering)Number of Investment Units
offered in the secondaryoffering
Offer priceTotal offer price
Delivery date:

20,476 investment units:::

JPY 58,898 per unit
JPY 1,205,995,448
July 19, 2019(3) Issuance of new investment units through thirdparty allotment
Number of investment units
offeredAmount to be paid
(issue value)
Total paid amount(total issue value)
Payment date
Allottee

Property Number: A51
Sale Date
Location: Minato-ku, Tokyo

Book Value (Note 1): JPY 2,269 million

Sales Price (Note 2): JPY 4,465 million

Expected Gain on Sale (Note 3): JPY 2,043 million

Transferee: Undisclosed (Note 4)

Legal Form of Asset: Trust beneficiary interest(Note 1)
As of December 31, 2019.
(Note 2)
Sales price shows sale prices set forth in the PSA ofproperty and does not include adjustment for
property taxes or city planning taxes, or national or
local consumption taxes.
(Note 3)Gain on sale is calculated by deducting the estimatedtransfer related cost and is subject to change upon
finalization of the financial results.
(Note 4)
The name of the transferee is not disclosed, as thetransferee’s consent has not been obtained fordisclosure.
(Note 5)For an overview of the sale of asset, please refer to“Status of Investment Corporation’s Assets underManagement 3. Asset Portfolio of Real Estate, etc.”of “I. Asset Management Report” as describedabove.

2. Debt Financing
In order to fund a portion of the acquisition price for two
hotel properties (domestic real estate trust beneficiaryinterests) acquired on January 6, 2020, INV resolved thefollowing debt financing at a meeting of the Board of
Directors held on January 6, 2020, and entered into a loan
agreement on the same day.
Lender:Outstanding balance
Interest rate, etc.

:::

20,476 investment units

45,476 investment units:

JPY 56,939 per unit

Interest
JPY
45,776payment
per unit date:

JPY 1,165,882,964

JPY 2,081,709,376::

August 15, 2019
Mizuho Securities Co.,Ltd.

August 2, 2018

- 90 -

City House Tokyo Shinbashi: January 15, 2020

Principal repayment
methodBorrowing method
Borrowing date
Maturity date

:

:
:
:
:

Sumitomo Mitsui Trust Bank,
LimitedJPY 6,980 million
Base Rate (1-month JPY
TIBOR) + 0.500%, 0.300%,
0.200%The last Japanese business dayof each month before theprincipal maturity date with
January 31, 2020 as the firstpayment date, and the principal
maturity dateLump-sum repayment
Unsecured/ non-guarantee
January 6, 2020
January 6, 2025, January 6,
2023, January 6, 2021

(Reference) Fiscal period ended June 30, 2019(from January 1, 2019 to June 30, 2019)

Fiscal period ended December 31, 2019(from July 1, 2019 to December 31, 2019)

2. Debt Financing
In order to fund a portion of the acquisition price for 18
hotel properties (domestic real estate trust beneficiaryinterests) acquired on July 19, 2019, INV resolved thefollowing debt financing at a meeting of the Board of
Directors held on July 1, 2019, and entered into a loan
agreement on the same day.

3. Acquisition of assets (properties)
INV completed the acquisition of the following two hotel
properties on January 6, 2020.

New Syndicate Loan (L)Lender:Outstanding balance
Interest rate, etc.

Interest payment datePrincipal repayment
methodBorrowing method
Borrowing date
Maturity date

:
:

:

:
:
:
:

Syndicate of lenders arranged
by Mizuho Bank, Ltd.
JPY 27,400 million
Base Rate (1-month JPY
TIBOR) + 0.700%, 0.550%,0.500%, 0.450%, 0.350%,
0.200%The last Japanese business dayof each month before theprincipal maturity date with
July 31, 2019 as the firstpayment date, and the principal
maturity dateLump-sum repayment
Unsecured/ non-guarantee
July 19, 2019
July 16, 2025, January 16,
2025, July 16, 2024, January
16, 2024, January 16, 2023,
July 18, 2020

3. Acquisition of assets (properties)
INV resolved acquisition of the following 18 hotel
properties (total acquisition price: JPY 82,646 million) on
July 1, 2019 and completed the acquisition on July 19,
2019.
Property Number: D64 Hotel MyStays Sapporo Aspen
Acquisition Date
: July 19, 2019
Acquisition Price (Note 1): JPY 15,543 million

Location: Sapporo-shi, Hokkaido

Completion Date

: December 1995

Legal Form of Asset: Trust beneficiary interest

Seller: Touyako Godo Kaisha

Total Floor Area

: 15,313.17 m2

Total Leasable Area

: 15,313.17 m2- 91 -

Property Number: D82 Hotel MyStays Premier Narita
Acquisition Date
: January 6, 2020
Acquisition Price (Note 1): JPY 10,593 million

Location: Narita-shi, Chiba

Completion Date

: May 1985

Legal Form of Asset: Trust beneficiary interest

SellerTotal Floor Area

: Adria
Tokutei
Kaisha: 36,519.70 m2

Total Leasable Area

: 36,519.70 m2

Mokuteki

Property Number: D83 Art Hotel Morioka
Acquisition Date
: January 6, 2020
Acquisition Price (Note 1): JPY 5,643 million

Location: Morioka-shi, Iwate

Completion Date

: March 1981

Legal Form of Asset: Trust beneficiary interest

SellerTotal Floor Area

: Heijo Tokutei Mokuteki
Kaisha: 16,727.08 m2

Total Leasable Area

: 16,727.08 m2(Note 1)

Acquisition price is based on the purchase priceindicated in the relevant purchase agreement anddoes not include acquisition-related expenses,
property taxes, city planning taxes or consumption
taxes.

(Reference) Fiscal period ended June 30, 2019(from January 1, 2019 to June 30, 2019)

Fiscal period ended December 31, 2019(from July 1, 2019 to December 31, 2019)

Property Number: D65 Art Hotel Ishigakijima
Acquisition Date
: July 19, 2019
Acquisition Price (Note 1): JPY 9,731 million

Location: Ishigaki-shi, Okinawa

Completion Date

: January 1984

Legal Form of Asset: Trust beneficiary interest

SellerTotal Floor Area

: Yaeyama Resort Hotel
Tokutei Mokuteki Kaisha: 17,247.54 m2

Total Leasable Area

: 17,247.54 m2

Property Number: D66 Hotel MyStays Fuji Onsen Resort
Acquisition Date
: July 19, 2019
Acquisition Price (Note 1): JPY 9,405 million

Location: Fujiyoshida-shi, Yamanashi

Completion Date

: November 2016

Legal Form of Asset: Trust beneficiary interest

SellerTotal Floor Area

: Saturnia Tokutei Mokuteki
Kaisha: 5,498.49 m2

Total Leasable Area

: 5,498.49 m2

Property Number: D67 Hotel Sonia Otaru
Acquisition Date
: July 19, 2019
Acquisition Price (Note 1): JPY 5,930 million

Location: Otaru-shi, Hokkaido

Completion Date

: April 1992
March 1998
November 2018
: Trust beneficiary interest

Legal Form of Asset
SellerTotal Floor Area

: Shirahama Tokutei Mokuteki
Kaisha: 6,509.41 m2

Total Leasable Area

: 6,509.41 m2

Property Number: D68 Hotel MyStays Kanazawa Castle
Acquisition Date
: July 19, 2019
Acquisition Price (Note 1): JPY 5,682 million

Location: Kanazawa-shi, Ishikawa

Completion Date

: June 1982
February 1991
January 1997
: Trust beneficiary interest

Legal Form of Asset
SellerTotal Floor Area

: Calvis Tokutei Mokuteki
Kaisha: 5,931.84 m2

Total Leasable Area

: 5,931.84 m2- 92 -

(Reference) Fiscal period ended June 30, 2019(from January 1, 2019 to June 30, 2019)

Fiscal period ended December 31, 2019(from July 1, 2019 to December 31, 2019)

Property Number: D69 Art Hotel Niigata Station
Acquisition Date
: July 19, 2019
Acquisition Price (Note 1): JPY 5,524 million

Location: Niigata-shi, Niigata

Completion Date

: April 1985

Legal Form of Asset: Trust beneficiary interest

SellerTotal Floor Area

: HL Investments 2 Tokutei
Mokuteki Kaisha: 10,403.01 m2

Total Leasable Area

: 10,403.01 m2

Property Number: D70 Hotel MyStays Nagoya Nishiki
Acquisition Date
: July 19, 2019
Acquisition Price (Note 1): JPY 5,197 million

Location: Nagoya-shi, Aichi

Completion Date

: March 1974

Legal Form of Asset: Trust beneficiary interest

SellerTotal Floor Area

: Shirahama Tokutei Mokuteki
Kaisha: 6,077.99 m2

Total Leasable Area

: 6,077.99 m2

Property Number: D71 Hotel Nord Otaru
Acquisition Date
: July 19, 2019
Acquisition Price (Note 1): JPY 4,296 million

Location: Otaru-shi, Hokkaido

Completion Date

: March 1996

Legal Form of Asset: Trust beneficiary interest

SellerTotal Floor Area

: Shirahama Tokutei Mokuteki
Kaisha: 6,047.43 m2

Total Leasable Area

: 6,047.43 m2

Property Number: D72 Hotel MyStays Kagoshima Tenmonkan
Acquisition Date
: July 19, 2019
Acquisition Price (Note 1): JPY 3,445 million

Location: Kagoshima-shi, Kagoshima

Completion Date

: September 1990

Legal Form of Asset: Trust beneficiary interest

SellerTotal Floor Area

: Kawaguchiko Tokutei
Mokuteki Kaisha: 7,659.55 m2

Total Leasable Area

: 7,659.55 m2- 93 -

(Reference) Fiscal period ended June 30, 2019(from January 1, 2019 to June 30, 2019)

Fiscal period ended December 31, 2019(from July 1, 2019 to December 31, 2019)

Property Number: D73 Art Hotel Asahikawa
Acquisition Date
: July 19, 2019
Acquisition Price (Note 1): JPY 3,197 million

Location: Asahikawa-shi, Hokkaido

Completion Date

: October 1987

Legal Form of Asset: Trust beneficiary interest

SellerTotal Floor Area

: Shirahama Tokutei Mokuteki
Kaisha: 25,131.84 m2

Total Leasable Area

: 25,131.84 m2

Property Number: D74 Hotel MyStays Matsuyama
Acquisition Date
: July 19, 2019
Acquisition Price (Note 1): JPY 3,098 million

Location: Matsuyama-shi, Ehime

Completion Date

: July 2000

Legal Form of Asset: Trust beneficiary interest

SellerTotal Floor Area

: Calvis Tokutei Mokuteki
Kaisha: 8,274.37 m2

Total Leasable Area

: 8,274.37 m2

Property Number: D75 Hotel MyStays Sapporo Susukino
Acquisition Date
: July 19, 2019
Acquisition Price (Note 1): JPY 3,059 million

Location: Sapporo-shi, Hokkaido

Completion Date

: May 1981

Legal Form of Asset: Trust beneficiary interest

SellerTotal Floor Area

: Kawaguchiko Tokutei
Mokuteki Kaisha: 2,853.26 m2

Total Leasable Area

: 2,853.26 m2

Property Number: D76 Hotel MyStays Sapporo Nakajima Park
Acquisition Date
: July 19, 2019
Acquisition Price (Note 1): JPY 2,118 million

Location: Sapporo-shi, Hokkaido

Completion Date

: February 1991

Legal Form of Asset: Trust beneficiary interest

SellerTotal Floor Area

: Shirahama Tokutei Mokuteki
Kaisha: 5,473.41 m2

Total Leasable Area

: 5,473.41 m2- 94 -

(Reference) Fiscal period ended June 30, 2019(from January 1, 2019 to June 30, 2019)

Fiscal period ended December 31, 2019(from July 1, 2019 to December 31, 2019)

Property Number: D77 Hotel MyStays Sapporo Nakajima Park
Annex
Acquisition Date
: July 19, 2019
Acquisition Price (Note 1): JPY 1,584 million

Location: Sapporo-shi, Hokkaido

Completion Date

: September 1991

Legal Form of Asset: Trust beneficiary interest

SellerTotal Floor Area

: Shirahama Tokutei Mokuteki
Kaisha: 1,775.21 m2

Total Leasable Area

: 1,775.21 m2

Property Number: D78 Flexstay Inn Sakuragicho
Acquisition Date
: July 19, 2019
Acquisition Price (Note 1): JPY 1,425 million

Location: Yokohama-shi, Kanagawa

Completion Date

: November 1991

Legal Form of Asset: Trust beneficiary interest

SellerTotal Floor Area

: Calvis Tokutei Mokuteki
Kaisha: 1,308.61 m2

Total Leasable Area

: 1,308.61 m2

Property Number: D79 MyCUBE by MYSTAYS Asakusa
KuramaeAcquisition Date
: July 19, 2019
Acquisition Price (Note 1): JPY 1,287 million

Location: Taito-ku, Tokyo

Completion Date

: September 1991

Legal Form of Asset: Trust beneficiary interest

SellerTotal Floor Area

: Calvis Tokutei Mokuteki
Kaisha: 2,156.70 m2

Total Leasable Area

: 2,156.70 m2

Property Number: D80 Hotel MyStays Kagoshima Tenmonkan
Annex
Acquisition Date
: July 19, 2019
Acquisition Price (Note 1): JPY 1,168 million

Location: Kagoshima-shi, Kagoshima

Completion Date

: February 1985

Legal Form of Asset: Trust beneficiary interest

SellerTotal Floor Area

: Kawaguchiko Tokutei
Mokuteki Kaisha: 2,047.70 m2

Total Leasable Area

: 2,047.70 m2- 95 -

(Reference) Fiscal period ended June 30, 2019(from January 1, 2019 to June 30, 2019)

Fiscal period ended December 31, 2019(from July 1, 2019 to December 31, 2019)

Property Number: D81 Hotel MyStays Nayoro
Acquisition Date
: July 19, 2019
Acquisition Price (Note 1): JPY 957 million

Location: Nayoro-shi, Hokkaido

Completion Date

: November 2014

Legal Form of Asset: Trust beneficiary interest

SellerTotal Floor Area

: Kawaguchiko Tokutei
Mokuteki Kaisha: 1,985.27 m2

Total Leasable Area

: 1,985.27 m2(Note 1) Acquisition price is based on the purchase priceindicated in the relevant purchase agreement and does notinclude acquisition-related expenses, property taxes, city
planning taxes or consumption taxes.

[Notes Related to Provision and Reversal of Allowance for Temporary Differences Adjustment](Reference) Fiscal period ended June 30, 2019(from January 1, 2019 to June 30, 2019)
The following reversal was made in the statement of cash
distribution:
1. Reasons, related assets and amounts(Unit: JPY thousand)Reason for reversal

Allowance fortemporary differences
adjustment

Sale of properties
Leasehold rights
with leasehold rights
in trust
in trust(125,201)

Related assets,etc.

2. Method of reversal
Related assets,
Method of reversal
etc.
Leasehold rights The corresponding amount is scheduled to bein trust
reversed upon sale, etc.

- 96 -

Fiscal period ended December 31, 2019(from July 1, 2019 to December 31, 2019)
Not ApplicableVI. Statement of Cash Distribution

Fiscal period ended
June 30, 2019 (Reference)(from January 1, 2019 toJune 30, 2019)I.

Unappropriated retained
earnings
II. Incorporation into
unitholders’ capital ofwhich, allowance fortemporary differences
adjustment
III . Distributions(Distribution per unit)
V. Retained earnings (losses)
carried forward
Calculation method of
distribution amountFiscal period ended
December 31, 2019(from July 1, 2019 to
December 31, 2019)

JPY 21,131,966,492

JPY 23,261,426,001

125,201,855－

JPY 21,131,966,492(JPY 1,656)

JPY 10,517,049,000(JPY 1,725)

JPY 11,622,477,597

JPY 12,744,377,001

Inaccordancewith
thedistribution policy set forth in
Article 17, Paragraph 1 of the
Articles of Incorporation of INV,
the distribution amount shall be theamount which does not exceed theamount of profits but exceeds 90%of the distributable income as
defined in Article 67-15 of theSpecial Taxation Measures Act.
However, in the event that any tax
losses arise, or if no profits havebeen recorded for tax purposes due
to tax losses carried forward, thedistribution amount may be as
reasonably determined by INV.
Pursuant to this policy, INV
determined the distribution amountto be JPY 9,384,287,040 out of net
income of JPY 21,239,877,303.
Moreover, INV does not make
Excess Profit Distribution set forthin Article 17, Paragraph 4 of the
Articles of Incorporation.

In accordance with the distribution
policy set forth in Article 17,
Paragraph 1 of the Articles ofIncorporation of INV, thedistribution amount shall be theamount which does not exceed theamount of profits but exceeds 90%of the distributable income as
defined in Article 67-15 of theSpecial Taxation Measures Act.
However, in the event that any tax
losses arise, or if no profits havebeen recorded for tax purposes due
to tax losses carried forward, thedistribution amount may be as
reasonably determined by INV.
Pursuant to this policy, INV
determined the distribution amountto be JPY 10,517,049,000 out of
net income of JPY 11,638,948,404.
Moreover, INV does not make
Excess Profit Distribution set forthin Article 17, Paragraph 4 of the
Articles of Incorporation.

- 97 -

Note
Accompanying English financial information, comprising Balance Sheet, Statement of Income and Retained
Earnings, Statement of Changes in Net Assets, Notes to financial statements and Statement of CashDistribution, have been translated from the Japanese financial statements of INV prepared in accordance with
the Act on Investment Trusts and Investment Corporations of Japan.
Under Article 130 of the Act on Investment Trusts and Investment Corporations of Japan, the Japanesefinancial statements for the six months ended June 30, 2019, have been audited by Ernst & Young ShinNihon
LLC, in accordance with auditing standards generally accepted in Japan. However, English translation of
the Japanese language report of independent auditors is not attached herein since the accompanying English
translation of Balance Sheet, Statement of Income and Retained Earnings, Statements of Changes in Net
Assets, Notes to financial statements and Statement of Cash Distribution is unaudited.
Regarding the English audited financial statements, please refer to the “Audited Financial Statements” on thewebsite of Invincible Investment Corporation: https://www.invincible-inv.co.jp/en/ir/library.html- 98 -

VII. Statement of Cash Flows (Reference Information)(Unit: JPY thousand)Fiscal period ended
December 31, 2019(from July 1, 2019 to
December 31, 2019)

Fiscal period ended
June 30, 2019(from January 1, 2019 toJune 30, 2019)
Cash flows from operating activities
Net income before taxes
Depreciation and amortization
Investment unit issuance costs
Loss on reduction entry of non-current assets
Amortization of investment corporation bondissuance costs
Loan-related costs
Interest income
Interest expenses
Foreign exchange losses (gains)
Increase (decrease) in allowance for doubtful accounts
Decrease (increase) in rental receivable
Decrease (Increase) in deposits paid
Decrease (increase) in refundable income taxes
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
Increase (decrease) in advances received
Increase (decrease) in deposits received
Decrease from sales of property, plant andequipment in trust
Decrease from sales of intangible assets in trust
Others, net
SubtotalInterest income received
Interest expenses paid
Income taxes paid
Net cash provided by operating activities
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
Payments of tenant leasehold and security deposits
Collection of tenant leasehold and security deposits
Other, net
Net cash used in investing activities
Cash flows from financing activities
Proceeds from short-term loans payable
Repayments of short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from issuance of investment corporation
bonds
Borrowing related expenses
Payment of distributions of earnings
Payments of distributions in excess of retained
earnings from allowance for temporary differences
adjustment- 99 -

21,240,482
3,168,320
115,319-

11,639,553
3,757,778
143,029

3,506

4,256

310,089(811)
599,960(23,481)62
285,339
96,4703,830
434,326
22,952
2,764,397
40,334
118,454(117,053)(347,981)

412,550(179)
702,863(32,090)(148)(344,338)(110,785)
31,539(2,426,511)(36,363)(2,577,357)(29,060)(92,670)(12,896)(199,247)

21,268,952

2,991,980

7,047,749(617,969)
56,413,251
811(603,432)(605)
55,810,025(148,847)
13,673,054
179(701,225)(605)
12,971,404(1,302,310)-(543,104)(83,576,781)(440,504)(323,779)(48,255)

61,654
896,949(58,789)(726,275)

67,02228,651(84,512,972)(1,099,000)
17,684,000(17,684,000)

2,686,000
61,775,000(37,061,000)-

2,971,665(167,123)(8,993,502)(839,086)(9,144,041)(85,002)-

Fiscal period ended
June 30, 2019(from January 1, 2019 toJune 30, 2019)(Unit: JPY thousand)Fiscal period ended
December 31, 2019(from July 1, 2019 to
December 31, 2019)

Payment of other distributions in excess of retained(204,006)
earnings
Proceeds from issuance of investment units
24,340,740
Net cash provided by (used in) financing activities(10,548,635)
44,729,277
Effect of exchange rate change on cash and cash
(12)
(13)
equivalents
Net increase (decrease) in cash and cash equivalents
44,535,102(26,812,304)
Cash and cash equivalents at beginning of period
11,064,604
55,599,707
Cash and cash equivalents at end of period*1 55,599,707*1 28,787,403(Note) Statement of cash flows is prepared based on the Regulation on the Terminology, Forms, and Preparation Methods ofFinancial Statements (Ministry of Finance Order No. 59 of 1963, as amended) and attached as reference. This
statement of cash flows is not subject to audit by an auditor pursuant to the Article 130 of the Investment Trust Act, andthus has not been audited by an auditor.

[Notes Concerning Significant Accounting Policies (Reference Information)]
By Period
Item
Cash and cash equivalents as stated inStatement of Cash Flows

Fiscal period ended
June 30, 2019(from January 1, 2019 toJune 30, 2019)
Cash and cash equivalents as stated in
the Statement of Cash Flows consistof cash on hand and cash in trust,
floating deposits, deposits in trust andshort-term investments that are veryliquid and realizable with a maturityof three months or less whenpurchased and that are subject toinsignificant risks of changes invalue.

Fiscal period ended
December 31, 2019(from July 1, 2019 to
December 31, 2019)
Cash and cash equivalents as stated in
the Statement of Cash Flows consistof cash on hand and cash in trust,
floating deposits, deposits in trust andshort-term investments that are veryliquid and realizable with a maturityof three months or less whenpurchased and that are subject toinsignificant risks of changes invalue.

[Notes to Statement of Cash Flows (Reference Information)]
By Period
Item*1. Relationship between cash andcash equivalents in Statement of
Cash Flows and amounts inaccompanying balance sheet

Fiscal period ended
June 30, 2019(from January 1, 2019 toJune 30, 2019)(As of June 30, 2019)(Unit: JPY thousand)Cash and bank
48,833,358
deposits
Cash and bank
6,766,348
deposits in trust
Cash and cash
55,599,707
equivalents- 100 -

Fiscal period ended
December 31, 2019(from July 1, 2019 to
December 31, 2019)(As of December 31, 2019)(Unit: JPY thousand)Cash and bank
17,924,733
deposits
Cash and bank
10,862,669
deposits in trust
Cash and cash
28,787,403
equivalents

“My Number” is issued to all citizens and residents of Japan and is necessary for taxation purposes oninvestment units. Thus, it is necessary for unitholders to notify their brokerage with their “My
Number.”Usage of “My Number” in investment units-related affairs“My Number” is recorded on the payment record and the payment record is filed with the relevant tax
authority pursuant to laws and regulations.
Major payment record*Payment record regarding cash distribution

Usage of “My Number” also includes taxation-related procedures on investment units. It is necessary
for unitholders to notify your “My Number” to your brokerage, etc.
Inquiries regarding notifying “My Number”⚫
⚫

Unitholders whose investment units are managed in brokerage accounts
Each brokerage
Unitholders who have no brokerage accountTransfer Agent Department, Sumitomo Mitsui Trust Bank, Limited
Toll-free Telephone Number 0120-782-031- 101 -Domestic Portfolio Map (As of February 29, 2020)

No. of Properties(Note 1)

No. ofHotels(Note 1)

No. ofResidential
Properties

Others

146

84

60

2

(Note 1) Including overseas assets.
(Note 2) For properties corresponding to the number and their overview,please refer to pages [28-30] and pages [61-64].

- 102 -

- 103 -Financial Conditions

JCR upgraded the credit rating of INV to A+ on February 4, 2020.

◼ Investment Corporation Bonds
Bonds name

IssuedDate

Term(years)Balance(JPY mn)

AnnualInterest Rate

Rating

1st Series Investment
Corporation Bonds

May 25, 2018

5.0

1,000

0.40%

A+ (JCR)

2nd Series Investment
Corporation Bonds

May 25, 2018

10.0

1,000

0.80%

A+ (JCR)

3rd Series Investment
Corporation Bonds

Oct. 12, 2018

5.0

2,000

0.55%

A+ (JCR)

4th Series Investment
Corporation Bonds

Oct. 28, 2019

5.0

1,000

0.48%

A+ (JCR)

5th Series Investment
Corporation Bonds

Oct. 28, 2019

10.0

2,000

0.90%

A+ (JCR)

Total

7,000

◼ Lender Formation (as of February 29, 2020)- 104 -

◼ LTV (based on appraisal value)(1) and Weighted Average Interest Rate(2)◼ DSCR◼ Rating
Rating Agency

Rating Object

RatingOutlookJapan Credit Rating
Agency, Ltd.

Long-term
Issuer Rating

A+

Stable(Note 1)

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

Calculated by the following formula: (Interest-bearing debts at the end of the relevant fiscal period, excluding short-term consumption tax loan) / (Total appraisal
value as of the end of the same period). For the preferred equity interest in the TMK which holds Sheraton Grande Tokyo Bay Hotel as an underlying asset, theacquisition price (INV’s investment amount) of such preferred equity interest is deemed as the appraisal value and included. For the Overseas Real Estate TK
Interest the underlying assets of which are “The Westin Grand Cayman Seven Mile Beach Resort & Spa” and “Sunshine Suites Resort”, the acquisition price (INV’s
TK investment amount) of such TK interest is deemed as the appraisal value and included regarding the calculation for “Dec. 2018”. Regarding “Jun. 2019” onward,
calculation is based on the appraisal value as of the end of each fiscal period. USD is converted into JPY amount via the forward exchange rate of USD 1=JPY
110.45 based on the foreign exchange forward contract entered into on July 26, 2018.
Calculated by the following formula: (Total loan amount outstanding at the relevant time multiplied by applicable interest rate at the relevant time for each loans)/ (The loan amount outstanding at the end of each fiscal period)
DSCR is calculated by dividing (i) by (ii) for the relevant period; (i) operating income, as adjusted for depreciation expenses from property rental business and any
loss (gain) on sales of property (ii) scheduled prepayments of loans payable, interest expenses s, interest expenses on investment corporation bonds and the amountof redemption of bond. Excluded the temporal increase of income due to the change of investment structure regarding overseas assets for the calculation of June2019 fiscal period.
DSCR (excluding hotel variable rent) is in the same manner as DSCR, except for excluding both hotel variable rent from operating income and management
contract revenue.

- 105 -

Overview of Unitholders/Investment Units

Historical Unit Price(Note)

Unit prices indicate the closing price on the TSE market. TSE REIT Index has been indexed, assuming the closing price of TSE REIT Index asof January 4, 2013, as the same as the closing price of INV’s unit on the same day.

.

Distribution of Unitholders(Note) Percentage figures are rounded to one decimal place.

- 106 -

Annual Schedule- 107 -

Information for Unitholders
For Unitholders
Investors’ Registry
Administrator
Special Account Management
Institution

Correspondence(Telephone Assistance)

Sumitomo Mitsui Trust Bank, Limited
1-4-1, Marunouchi, Chiyoda-ku, Tokyo<Unitholders of the former Tokyo Growth REIT Investment Inc.>
Mitsubishi UFJ Trust and Banking Corporation
1-4-5, Marunouchi, Chiyoda-ku, Tokyo<Unitholders of the former LCP Investment Corporation>
Sumitomo Mitsui Trust Bank, Limited
1-4-1, Marunouchi, Chiyoda-ku, Tokyo
Transfer Agent Department, Sumitomo Mitsui Trust Bank,
Limited
2-8-4, Izumi, Suginami-ku, Tokyo, 168-0063
Toll-free Telephone Number 0120-782-031
Administrative services are available at the main and branch
offices throughout Japan of Sumitomo Mitsui Trust Bank,
LimitedNotification Process for Address Changes
Please notify your brokerage (financial instruments business operator) regarding changes to addresses, names,
registered seals, and the like. Unitholders who have special accounts instead of brokerage accounts should
contact the transfer account management institution (financial instruments business operator) below.
Unitholders of the pre-merger Investment Corporation (former Tokyo Growth REIT Investment Inc.)
Mitsubishi UFJ Trust and Banking Corporation Toll-free Number: 0120-255-100
Unitholders of the former LCP Investment Corporation
Sumitomo Mitsui Trust Bank, Limited
Toll-free Number: 0120-782-031
Dividends
Unitholders may collect “dividends” by submitting the “Dividends Receipt” at your local Japan Post Bankor at the deposit teller of a post office. In the case that the collection period has past, designate a collection
method on the back of the “Dividends Receipt,” and either mail the receipt to the Transfer Agent Departmentof the Sumitomo Mitsui Trust Bank, Limited or collect from a branch teller.
(Bank Transfers)
Should you desire to specify bank transfers for future dividends, please notify your brokerage(financial instruments business operator).
(Note)

Please collect dividends within 3 years of distribution. Please note that payments cannot be made after
3 years due to the rules and regulations of the Articles of Incorporation of the Investment Corporation.

- 108 -

Notification(Notice of Dividend Payment)
The 2008 amendment of the Special Taxation Measures Law (Act No. 23 of April 30, 2008) mandated thesending to unitholders a “Notice of Dividend Payment” stating the dividend amount, amount of taxes
withheld, and the like for dividends payable in and after January 2009. If you collect dividends via a“Dividends Receipt,” please view the “Notice of Dividend Payment” sent alongside it. If you have specified
a wire transfer, the “Dividend Statement” delivered with the dividend payment is the “Notice of Dividend
Payment.”(Characters for Addresses and Names of Unitholders)With the digitization of investment securities, if there are Chinese characters in your address or names that
the Japan Securities Depository Center (JASDEC) has not included in the transfer system, JASDEC registers
them in the Investors’ Registry by converting part or all of the characters to those that JASDEC has includedin the transfer system or to katakana. Please be aware that correspondence may be addressed using
characters that JASDEC has included in the transfer system. Please inquire with your brokerage regarding
characters registered for your address and name.
Inquiries
For inquiries regarding INV: Consonant Investment Management Co., Ltd.
TEL: 03-5411-2731 (Main)
Weekdays 9:30-17:30- 109 -