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, 2020 (July 1, 2020 to December 31, 2020)
Content
Greetings from Naoki Fukuda, Executive Director of Invincible Investment Corporation and President &CEO of Consonant Investment Management Co., Ltd.
Top Interview
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 December 31, 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.

Our thoughts and prayers go out to all those

who have contracted the COVID-19 virus, as well as to their families and friends.
We hereby provide you with a report on INV's asset management and financial results for the 35th fiscal
period (from July 1, 2020 to December 31, 2020) (the "Reporting Period").
In the Reporting Period, which started after the first state of emergency declaration was lifted, demand forhotel accommodations from domestic customers began to gradually return while hotels took measures tocombat the spread of infectious diseases. Hotel occupancy rates recovered toward the beginning of autumn,
centered on full-service and resort-type hotels located in regional cities, partly due to the effect of the Go To
Travel campaign, which was implemented to support tourism.

However, an increase in the number of

COVID-19 infections resulted in the so called ‘Third Wave’ of infections, which prompted the nationwide
suspension of the Go To Travel campaign in December 2020.

As a result, the occupancy rate of hotels

declined. The operating environment for hotels remained extremely challenging throughout the Reporting
Period, and INV was forced to accept substantial rent reductions from MyStays Hotel Management Co., Ltd.,the major tenant and hotel operator, during the Reporting Period.
The occupancy rate of hotels located in the Cayman Islands was also low during the Reporting Period, as thegovernment continued to stop accepting tourists from abroad.
Amid this challenging business environment, INV sold 6 residential properties on December 18, 2020 andrecorded a gain on sale of approximately JPY 2.6 billion in order to avoid a net loss for the Reporting Period
and strengthen its financial soundness. Of the sale proceeds, JPY 10 billion was used to prepay outstanding
borrowings in January 2021, reducing the interest-bearing debt ratio.
As a result, operating revenue for the Reporting Period was JPY 8,340 million, operating income was JPY
1,690 million, and net income was JPY 623 million (JPY 102 per unit).

In order to reward investors who

have invested despite the harsh environment, we decided to partially reverse the profit carried forward fromthe previous fiscal period and pay a dividend of JPY 167 per unit.
In January 2021, a state of emergency primarily targeting major metropolitan areas was declared again,
continuing the harsh environment for the hotel sector. However, the number of new infections has started
to decline not only in the Tokyo metropolitan area but also nationwide, and vaccinations started on February
17. As a result, the COVID-19 pandemic is expected to gradually subside.
In the residential portfolio, the other core asset class, occupancy rates declined slightly, which could be dueto the impact of the COVID-19 pandemic.
supporting INV's profitability.

However, relatively stable performance has continued,

The existence of stable profits from the residential assets have alleviated any

financial issues such as payment of interest on interest bearing debt, keeping the relationship with our lenders
favorable.
-1-Our business outlook remains uncertain due to the COVID-19 pandemic.

However, we will continue totake initiatives to maximize hotel revenues under the new environment classified as "With Corona", while
placing a high priority on the improvement of "sustainability" as a focal point for management to create longterm value in a new business environment.

We, INV and its Asset Management Company, will make every

effort to manage assets with the aim of achieving a recovery in business performance while contributing to
the best interests of unitholders.

Your continued support is highly appreciated.
Naoki Fukuda
Executive Director, Invincible Investment Corporation
President & CEO, Consonant Investment Management Co., Ltd.

-2-

Summary of Financial Results
Period from
July 1, 2018 to
December 31, 2018

Period fromJanuary 1, 2019 toJune 30, 2019

Period from
July 1, 2019 to
December 31, 2019

Period fromJanuary 1, 2020 toJune 30, 2020

Period from
July 1, 2020 to
December 31, 2020

Operating Revenues(JPY million)

14,451

27,33918,587

9,410

8,340

Ordinary Income(JPY million)

8,384

21,240

11,639424

624

Net Income(JPY million)

8,384

21,239

11,638423

623

Net Assets(JPY million)

221,364

233,046

259,730

249,538

249,641

Total Assets(JPY million)

455,362

467,931522,431516,663

516,490

Net Assets per Unit
(JPY)

39,063

41,12542,60140,92940,946

Net Assets/Total
Assets (%)

48.6

49.8

49.7

48.3

48.3

Distribution per Unit
(JPY)

1,683

1,656

1,725

69

167

5,666,840

5,666,840

6,096,840

6,096,840

6,096,840

Number of Units
Issued (Unit)

Distribution per unit for the 35th fiscal period(the fiscal period ended December 2020)

JPY 167(Note) The forward-looking statements, forecasts and goals described in this report are based on available information, assumptions andestimates as of February 28, 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.

-3-Top Interview
Q: In the previous fiscal period (June 2020 Fiscal Period), DPU decreased significantly due to theimpact of COVID-19. What was the situation during the December 2020 Fiscal Period (the“Reporting Period”)?
A: In the Reporting Period, which started after the first state of emergency declaration was lifted, demandfor hotel accommodations from domestic customers began to gradually return amid the backing of Go
To Travel campaign. Demand recovered from summer to autumn, mainly for full-service and resort-type
hotels in provincial areas, and it was anticipated that the recovery would continue toward the end of theyear.

However, the number of infected people has grown drastically since late November, and demand

for tourism and hotels has dropped drastically due to a request to refrain from self-imposed operations
and the nationwide termination of Go To Travel campaign in December.

Over the Reporting Period,

the situation surrounding hotels has remained extremely demanding as in the previous period. However,
we positively believe that hotel demand would recover from the beginning of autumn and that INV'shotel portfolio is more likely to benefit from a recovery in domestic tourism demand due to thediversification of locations and hotel types.
Q: As in the previous fiscal period, did you take measures to reduce rents for tenants in the Reporting
Period as well?
A: In the previous fiscal period, MyStays Hotel Management, Inc. and its affiliates (the "MHM Group"),tenants for 73 of the 84 domestic hotel portfolios owned by INV, were granted a waiver of fixed rent,
the burden of property management costs, and an increase in management fees payable to the MHM
Group for the 4 months from March - June 2020.

In the Reporting Period, we reduced fixed rents for

the MHM Group in light of the ongoing slump in the performance of hotels affected by COVID-19.
However, we did not bear property management expenses or increase management outsourcing fees tothe MHM Group like the condition contracted in the previous period. As a result, in the year ended
December 31, 2020, we received a total of JPY 2.65 billion in rent from the MHM Group, including
variable rent.

This represents approximately 41% of the amount under the original leasing terms andconditions.
Q: What is the situation with hotels in the Cayman Islands?
A: The Cayman Islands government closed the main international airport in late March last year, and bothINV owned hotels were closed to reduce operating costs. Subsequently, the company only operated
restaurants for local customers, but after the International Airport resumed operations in October withresidents and others, Sunshine Suites Resort resumed operations primarily for resident self-quarantine,
as designated by the Cayman government.

However, Occupancy in October-December 2020 at theSunshine Suites Resort was only about 30%.
-4-

In the Cayman Islands, COVID-19 vaccinations began in January 2021, and it has been announced thatthe government intends to resume accepting tourists when the vaccination rate by the public reaches acertain percentage.

However, the specific timing has not been announced at this time.

Approximately 80% of tourists to the Cayman Islands are visitors from the United States, so we need tolook at the situation in the United States.

The 2 hotels owned by INV will take all possible measures

to combat COVID-19 infections preparing for the full resumption of operations, and we expect toincrease revenues after resumption.
Q: Please tell us the financial condition of the investment corporation. Are there any problems withfinancing?
A: During the Reporting Period, we refinanced JPY 30.5 billion in July 2020, JPY 3.0 billion in September,
and JPY 1.8 billion in October.

All the borrowings were refinanced in the same amount as the existing

borrowing amount, without any problems. We have also refinanced JPY 4.2 billion on January 22, 2021.
LTV (based on appraisal value) increased to 47.6% as of the end of the Reporting Period due to the saleof properties in December 2020.

However, as of the end of February 2021, LTV declined to 45.8% as

a result of the prepayment of JPY 10 billion of existing borrowings on January 29, 2021 by using the
majority of proceeds from the asset sales in December 2020. Since 2020, when the COVID-19
pandemic began, INV has not violated any of the financial covenants relating to borrowings fromfinancial institutions and others to date. Considering the recent uncertainty in the overall economy andhotel demand, we strive to be flexible in responding to changes in the operating environment by
securing cash.

Cash on hand is adequate for interest payments, and there is no problem with INV'scash flow.
Q: In the Reporting Period, INV withdrew JPY 65 per unit from its retained earnings, but why don’t
you utilize it more?
A: Since November 2020, the so called 'Third Wave' of COVID-19 infections saw a noticeable increase,and the state of emergency declaration was reissued in January 2021, which casts a shadow as to when
COVID-19 will be brought to a manageable level. In light of this situation, while we want to return asmuch as possible to our unitholders, we believe that maintaining sufficient cash on hand is important tosafeguard financial stability of the business environment during these uncertain times, which in turncontributes to the interests of our unitholders.
utilize retained earnings of JPY 65 per unit.

Based on a comprehensive judgment, we decided to
We will carefully consider the future withdrawal ofretained earnings while paying close attention to the situation.
Q: Please tell us about your outlook for the future.
A: In 2021, the second state of emergency declaration was issued from the beginning of the year, mainly in
the Tokyo metropolitan area, which continues to pose challenges for the hotel market, which is one of-5-

INV’s two core asset classes. Although there are bright signs such as the start of vaccinations in Japanon February 17, there are still many uncertainties and the outlook for business results remains extremely
difficult.

We believe at this point in time that it is prudent maintain guidance on our forecast for the

FY2021 as "To Be Determined."On the other hand, we expect domestic travel demand to recovergradually in the future due to the increase in vaccinations, the decline in the number of new infections,the resumption of Go To Travel campaign, and other policies.
From a financial perspective, the rental income from the residential assets and commercial facilities
covers most of our interest payments on interest-bearing debt and our operating expenses.

In addition,

as we have a certain amount of cash on hand, we do not anticipate any adverse effects on the future
repayment of interest-bearing debt or the payment of operating costs.
We sincerely apologize for the inconvenience caused to our investors, and we ask for yourunderstanding in this matter. After the COVID-19 pandemic is over, we hope that you will enjoy
traveling utilizing our Unitholder Benefit Program.

-6-

ESG Initiatives
INV recognizes the importance of environmental, social, and governance (ESG) considerations in real estate
investment management from the viewpoint of sustainability such as economic and social development andcontributing to global environmental conservation, and regard improvement of sustainability as an importantmanagement issue and implement initiatives to contribute to make our society sustainable.
Initiatives for Environment
Implementation of other measures for energy saving and CO2 reduction
INV promotes the following environmentally friendly renovations in our portfolio.









Energy efficiency
Automatic meter readings (AMR)（2）Introduction of BEMS（1）Introduction of LED lighting (all or part of property)（118）
Installation of high-efficiency equipment and appliances（35）Installation of gas generation（10）Installation of inverters（32）Introduction of on-site renewable energy （2） Water saving
 Introduction of whole or part of the water-saving type toilet（9） Installation of water-saving showers（76） Implementation of wastewater treatment on the premises（1）Initiatives by Hotel Operator
Mystays Hotel Management Co., Ltd. (MHM), the main operator of INV's domestic hotel portfolio, has
implemented various initiatives for Energy Conservation and CO2 Reduction.


Eco-friendly plan at hotel "ECO-Plan"
Encouraging guests to use eco-friendly plans by lowering the price of plans that do not require linen
exchange when guests stay 7 consecutive nights

Conducted energy-saving checks

Reducing CO2 Emissions from Food Transportation at Hotels (Hotel Epinard Nasu)
Contributing to CO2 reductions by cooperating with farmers and dairy farmers in Tochigi Prefecture to
reduce the procurement from prefectures other than Tochigi
Elimination for CO2 Reduction
Annual delivery volume: 156t (approx. 13,000kg/month x 12 months)
Annual CO2 emissions
Case of transporting from Tokyo:
156t × 73 (CO2 emissions coefficient [g/t・km]) × 160km = 1822kg
Case of transporting from Tochigi Prefecture:
156t × 73 (CO2 emissions coefficient [g/t・km]) ×50km = 569kg
Difference:
1,253kg/year

Correspond to CO2absorbed by 26 trees

Source: Hotel epinard Nasu official website-7-

Initiatives for Society
Contribution to Disaster Prevention
Three properties in INV portfolio are designated as "Tsunami Evacuation Building1"
zzzzzzzzzzzzzzzzzzzzzzHotel MyStays Shimizu

Takamatsu Tokyu REI Hotel

Hotel MyStays Kagoshima Tenmonkan(Note 1) Buildings designated by municipalities in advance as an emergency evacuation site for local residents to evacuate temporarily whena Tsunami inundates an area, in areas where it is considered difficult to evacuate due to time delay from the occurrence of theearthquake to arrival of the Tsunami considering geographical conditions

Asset Management Company Initiatives for Employees
 Regular performance appraisals and feedback processes
All employees set an annual goal following an interview with their reporting supervisor. We conduct personnel evaluations
at the end of the fiscal period after an interview with all employees to look back on their performance and provide feedback on
the evaluation results. The result of those performance reviews are reflected in employees' compensation. We have establisheda transparent personnel evaluation system through regular measurement and feedback processes.
 Respect for human rights and promotion of diversity
We accept differences in diverse professional abilities and values as well as paying respect to positive heterogeneity in order tomaximize the abilities of each individual employee. We aspire to achieve sustainable corporate growth while creating
additional value.
※Breakdown of directors and employees as of the end of 2020

 Initiatives for health and well-being of each employee
We have established various benefit programs listed below to support each work/lifestyles of employees.
e.g. Childcare leave, Family care leave, Family care leave to care for children, etc.

Initiatives by Hotel Operator
 Participation in Local Activities
MHM has implemented various initiatives to contribute to local communities in many areas.


Clean-up activities of the surrounding roads and rivers (Hotel MyStays Matsuyama)
Official partner agreements to support community-based sports club teams (Hotel MyStays Haneda)
Support and cooperation for community festivals, community disaster prevention activities, and publichealth activities (Hotel MyStays Kanda and many others) Local Production for Local Consumption in Food Procurement
Supporting local agriculture and contributing to the promotion of food education by using food produced in Tochigi Prefecture,-8-

where the hotel is located, for ingredients at restaurants in Hotel Epinard Nasu
Developed "Nasu-no-Uchi Boxed lunches (abbreviated as "Nasuben")" using foodstuffs
produced in Nasu, including Nasu Wagyu (Beef), Koshihikari (Rice), Shirobijin-negi (Onion),
Nira (Chinese chives), Spinach, Apples, Udo (Wild plants), Carrots, and Milk.

GRESB Real Estate Assessment1
INV is promoting initiatives aiming to acquire “Green Star” in the GRESBReal Estate Assessment since 2021
(Note 1)GRESB is an annual benchmarking program to evaluate ESG considerations ofproperty companies and real estate funds. The GRESB Real Estate Assessment isdistinguished by its comprehensive evaluation of initiatives for sustainability of property
companies, REITs and real estate funds, not of individual properties. GRESB rating is a relativeevaluation based on comprehensive scores and the highest being "5-stars".

-9-

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)
 Sheraton Grande Tokyo Bay Hotel
Applicable Hotels
 All MyStays hotels(Note 2)
All Unitholders whose names are recorded on Invincible’s Unitholders’ Registry
as of the relevant record dates:
Eligible Unitholders *INV decided to remove the eligibility requirement of "holding 10 or moreunits" to enable all INV unitholders to utilize the Unitholder Benefit
Program from the June 2020 Fiscal Period and onwards.
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)

Sheraton Grande Tokyo Bay Hotel
Reservation via phone or Email All MyStays hotels
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)

Hotel MyStays Premier Akasaka

The details of the unitholder benefit program described above are as planned by Invincible as of August 31, 2020, and the program may be changed orabolished even after it is has been introduced.

- 10 -

(Note 2)(Note 3)

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.

- 11 -

I.

Asset Management Report

Overview of Asset Management
1

Trends in Investment Corporation’s Operating Results
31st

32nd

33rd

34th

35th

fiscal period

fiscal period

fiscal period

fiscal period

fiscal period

Jul. 1, 2018 toJan. 1, 2019 toJul. 1, 2019 toJan. 1, 2020 toJul. 1, 2020 toDec. 31, 2018

Jun. 30, 2019

Dec. 31, 2019

Jun. 30, 2020

Dec. 31, 2020

(Note 1) (JPY thousand)

14,451,005

27,339,670

18,587,253

9,410,225

8,340,593(Rental revenue – real estate)(JPY thousand)

13,604,224

12,153,399

14,545,826

5,838,836

5,738,249

Operating expenses(JPY thousand)

4,936,248

5,154,599

5,728,269

7,913,247

6,649,749(Property-related expenses)(JPY thousand)

4,450,676

4,490,658

4,673,007

6,801,584

5,044,533

Operating income(JPY thousand)

9,514,756

22,185,070

12,858,984

1,496,977

1,690,843

Ordinary income(JPY thousand)

8,384,676

21,240,482

11,639,553

424,522624,333

By Period

Reporting period

Operating revenue

Operating Results

Net income(JPY thousand)

8,384,071

21,239,877

11,638,948

423,917623,728

Total assets(a) (JPY thousand)

455,362,796

467,931,975

522,431,999

516,663,418

516,490,350

(%)

21.6

2.8

11.6

(1.1)

(0.0)

(JPY thousand)

229,873,000

228,774,000

259,174,000

263,468,000

262,588,000

249,538,194

249,641,218(change from last period)
AssetsInterest-bearing debt
Net assets(b) (JPY thousand)

221,364,900

(%)

21.9

233,046,414
5.3

259,730,758
11.5

(3.9)

0.0

Unitholders’ capital(JPY thousand)

211,092,540

211,092,540

235,701,512

235,701,512

235,701,512

Total distributions(c) (JPY thousand)

9,537,291

9,384,287

10,517,049

420,6811,018,172(Note 2) (%)

110.3

44.2

90.4

99.2

163.2

(d) (Units)5,666,840

5,666,840

6,096,840

6,096,840

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

39,063

41,12542,60140,92940,946(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(c) / (d) (JPY)

1,683

1,656

167

(JPY)

1,632

1,656

1,725
1,725

69

(Distributions of earnings per unit)

69

167

(Distributions in excess of retained

(JPY)

51

―

―

―

―

2.0

4.6

2.4

0.1

0.1

4.0

9.3

4.7

0.2

0.2

4.2

9.3

4.7

0.2

0.2

8.3

18.9

9.4

0.3

0.5

48.6
0.1

49.8
1.2

49.7
(0.1)

48.3
(1.4)

48.3

(%)
(Note 4) (JPY thousand)

12,192,581

11,247,273

14,490,677

3,392,004

3,703,215

earnings per unit)
Return on assets(annualized)
Financial Measures

Return on equity(annualized)
Capital ratio(change from last period)
NOI(Net Operating Income)(Note 4) (%)(Note 4) (%)(b) / (a) (Note 4) (%)

0.0(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.

- 12 -

(Note 4) Figures above are calculated as below, and ratios are rounded to one decimal place. Figures annualized according
to the number of days are also shown.
Return on assets = Ordinary income for relevant period / ((Total assets at start of relevant period + Total assets at endof relevant period) / 2) x 100.
Return on equity = Net income for relevant period / ((Net assets at start of relevant period + Net assets at end of
relevant period) / 2) x 100.
Capital ratio = Net assets at end of relevant period / Total assets at end of relevant period x 100.
NOI = Rental revenue – Property-related expenses + Management contract revenue - Management contract expenses+ Depreciation expense for relevant period- 13 -

2

Overview of Asset Management for the Fiscal Period Ended December 2020(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, 2020 (“Reporting Period”), INV sold six residential properties on December 18,
2020. As a result, INV's portfolio at the end of the Reporting Period comprised of 142 properties (86 hotels (Note 3)(Note 4), 54 residential properties and two others) with a total acquisition price of JPY 502,717 million (Note 5).
Furthermore, INV’s hotel portfolio has reached the largest asset size (Note 6) of JPY 450.6 billion (86 properties, 15,597
rooms) among all J-REIT hotel portfolios including hotel-and-inn-specific type investment corporations.
(Note 1)
(Note 2)

US Eastern Standard Time
As of July 2011, Calliope owned 97.35% of issued shares of the Asset Manager and the investment ratio
reached 100% in October 2013. Calliope transferred 80.0% of issued shares to Fortress CIM Holdings L.P.,
a subsidiary of SoftBank Group and 20.0% to SoftBank Group on March 29, 2018. As of the date of this- 14 -

(Note 3)(Note 4)(Note 5)(Note 6)(b)document, SoftBank Group owns 100% of issued shares of the Asset Manager directly and indirectly.
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.
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.
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 inconnection with the termination of TK agreement, is deemed as the acquisition 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 foreignexchange forward contracts concluded on July 26, 2018 and executed on September 26, 2018 in connection
with the investment in the TK interest by INV. Hereinafter the same shall apply.
“The largest asset size … among all J-REIT hotel portfolios” refers to the total acquisition price of 86 hotels
owned by INV as compared with the total acquisition price of hotels (including inns and other accommodation
facilities) owned by listed investment corporations other than INV as of December 31, 2020.

Operational Environment and Performance

Given the enormous impact of COVID‐19 on the economy as a whole, especially in the hotel sector, on
September 10 and December 11, 2020, INV entered into a Memorandum of Understanding (“MOU”) to
amend each fixed‐term building lease and property management agreement (ʺMLPM Agreementsʺ)pertaining to the rent conditions for the periods from July 1, 2020 to September 30, 2020 and from October 1,
2020 to December 31, 2020 for domestic hotels owned by INV and operated by INVʹs main tenant, MyStays
Hotel Management Co., Ltd. (“MHM”) and its affiliates (collectively the “MHM Group” along with MHM)
(each MOU is referred to as the “September 2020 MOU” and “December 2020 MOU”, respectively).
Pursuant to the September 2020 MOU and the December 2020 MOU, we have changed the rent payment
conditions of MLPM Agreements in terms of the amount of fixed rent payment, the variable rent calculation
method, payment method of rent and payment date. The rent paid by the MHM Group for the threemonths of July through September was fixed rent of JPY 800 million and variable rent of JPY 391 million, fora total of JPY 1,191 million, while for the three months of October through December was fixed rent of JPY
806 million and variable rent of JPY 652 million, for a total of JPY 1,458 million. The rent paid by the MHM
Group for the Reporting Period was fixed rent of JPY 1,606 million and variable rent of JPY 1,043 million, fora total of JPY 2,649 million. This is equivalent to 41.0% of fixed rent for the same period under the original
MLPM Agreements. As a result, NOI for the 73 hotels operated by the MHM Group for the Reporting
Period was JPY 1,912 million.

- 15 -

For the December 2020 fiscal period, the portfolio NOI (Note 1) decreased by 75.6% or JPY 11,460 million to
JPY 3,703 million compared to the same period in the previous year (the December 2019 fiscal period). The
hotel portfolio NOI decreased by JPY 11,262 million, which represents 74.3% points of the decline in portfolio
NOI. The residential portfolio NOI (Note 2) also decreased by JPY 193 million, which represents 1.3%
points of the decline in portfolio NOI, due to asset sales. The portfolio maintained a high averageoccupancy rate (Note 3) of 99.1% for the Reporting Period.
Commentary on hotel and residential performance in the Reporting Period is as described below.
The NOI for the Reporting Period of the 75 domestic hotels (Note 4) owned by INV decreased by 83.6%
compared to the same period in the previous year (figures exclude nine domestic hotels with fixed‐rent leaseagreements among the 84 domestic hotels owned by INV as of the end of the Reporting Period, including
Sheraton Grande Tokyo Bay Hotel, the underlying asset of the preferred equity interest of TMK owned by
INV). The 75 domestic hotels recorded an occupancy rate (Note 5) of 48.3% (‐40.0 points YoY), ADR (Note6) of JPY 8,374 (‐21.1% YoY), and RevPAR (Note 7) of JPY 4,046 (‐56.9% YoY).
Westin Grand Cayman Seven Mile Beach Resort & Spa and Sunshine Suites Resort recorded an averageoccupancy rate of 4.5% (‐67.8 points YoY), ADR of USD 173 (‐47.1% YoY), and RevPAR of USD 8 (‐96.7% YoY)
for the Reporting Period.
Regarding the hotel sector, domestic hotel demand significantly declined due to a sharp reduction in
inbound visitors and a shift in mindset to refrain from business trips and leisure travel. The temporary
closure of the Owen Roberts International Airport from March 23, 2020 due to the COVID‐19 pandemic
caused a significant reduction in hotel demand at the two Cayman hotels. Owen Roberts International
Airport has resumed acceptance of foreign nationals on a limited basis and Sunshine Suites Resort has
resumed operations from October 2020 after being selected as one of the hotels for isolation facilities.
However, Westin Grand Cayman Seven Mile Beach Resort & Spa is expected to remain closed for the time
being, except for one restaurant, as the Cayman Islands government has not disclosed when the ban on
tourists will be lifted.
Regarding the residential portfolio, the average occupancy rate (Note 3) of 60 residential properties (Note 8)
for the Reporting Period was 94.6%, a decrease of 1.7 points compared to the same period in the previous
year due to prolonged vacancy periods until a new tenant moves in, particularly in the Tokyo 23 wards andthe Tokyo metropolitan area, where INV has a large investment ratio. The NOI (Note 2) of the 60 residential
properties for the Reporting Period decreased by 2.3% compared to the same period in the previous year,
due to the sale of six residential properties executed on December 18, 2020. NOI for the 54 residential
properties, excluding the six properties sold, decreased by 0.8% year‐over‐year. COVID‐19 seems to have
only a minor impact on the residential rental market, and trends for rent at city‐center residential properties
with small‐type rooms maintained a moderate increase. Under such circumstances in the macro
environment, INV continues to focus on its rent increase program for both new leases and renewals as wellas initiatives to reduce residential leasing costs based on a detailed market analysis of each property andunit. The rent increase program for the 60 residential properties (Note 8) continues to produce positive
results, as rent has increased for both new and renewal contracts of residential properties owned by INV.
The average rent per tsubo per month (Note 9) for the Reporting Period increased by 0.6% YoY to JPY 9,132,
and the recovery of occupancy rate is a top priority.
In the Reporting Period, INV realized a rent increase for 46.5% (based on the number of contracts) of the newresidential lease contracts for an average rent increase of 0.2% compared to the previous rent across all newleases (Note 10). INV achieved a rent increase for 36.8% (based on the number of contracts) of contract
renewals for an average rent increase of 1.2% compared to the previous rent across all renewal leases (Note10), while maintaining a high contract renewal rate (Note 11) of 84.1%, an increase of 0.9 points compared tothe same period in the previous year. Combined, new leases and renewal leases were signed at 0.7% higher
than the previous leases (Note 10).

- 16 -

The total appraisal value of 141 properties was JPY 530,860 million (1 out of the 142 properties owned by
INV at the end of the Reporting Period is excluded from the appraisal calculation: Sheraton Grande Tokyo
Bay Hotel (preferred equity interest) for which the appraisal value of such interest is not available). The
portfolio has an unrealized gain of JPY 65,307 million (Note 12) and an unrealized gain ratio of 14.0% (Note12). The total appraisal value of 141 properties which were owned throughout the Reporting Period
increased by 0.1% from JPY 530,486 million at the end of the June 2020 fiscal period to JPY 530,860 million at
the end of the Reporting Period.

Key Performance Indicators of 75 Domestic Hotel Properties (Note 4)
December 2020 fiscal period

Year-on-year change

Occupancy Rate (Note 5)

48.3%-40.0pt

ADR (JPY) (Note 6)

8,374-21.1%

RevPAR (JPY) (Note 7)

4,046-56.9%GOP (JPY million) (Note 13)

3,344-74.0%Key Performance Indicators of Cayman Hotels
December 2020 fiscal period
Occupancy Rate (Note 5)

Year-on-year change

4.5%-67.8pt

ADR (USD) (Note 6)

173-47.1%

RevPAR (USD) (Note 7)8-96.7%GOP (USD) (Note 13)-3,775,765-

Key Performance Indicators of 60 Residential Properties (Note 8)
December 2020 fiscal period
Occupancy Rate (Note 3)
Average Rent per Tsubo per Month(JPY) (Note 9)
NOI (JPY million) (Note 2)(Note 1)

(Note 2)

(Note 3)(Note 4)Year-on-year change

94.6%-1.7pt

9,132

+0.6%

1,614

-2.3%

“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) + (Management Contract Revenue of the Cayman Hotels‐Management
Contract Expense)
For the comparison of NOI for the residential properties, one-off insurance-related revenues and expenses aswell as one-off custodian fee associated with a trust split are excluded. NOI of six properties which are Nisshin
Palacestage Higashi-Nagasaki, Nishiwaseda Cresent Mansion, Neo Prominence, City Court Kitaichijo,
Lexington Square Akebonobashi and Lexington Square Daitabashi sold on December 18, 2020 is based on thedata through the day before sale date, excluding one-off custodian fee associated with property sales.
Hereinafter the same shall apply.
“Average Occupancy Rate” and “Occupancy Rate” for the portfolio or the residential properties are calculatedby dividing the sum of total leased area by the sum of total leasable area at the end of each month during therelevant period.
Of the 84 hotels held as of the end of the December 2020 Fiscal Period (including the Sheraton Grande Tokyo
Bay Hotel, the underlying asset of the preferred equity interest of TMK owned by INV), the following nine
hotels with fixed-rent lease agreements are excluded: Super Hotel Shinbashi/Karasumoriguchi, Comfort Hotel- 17 -

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. In addition, the figures for the properties acquired after July 2019 are calculated on theassumption INV had acquired those properties on July 1, 2019, using the actual figures provided by the sellersof such properties for the period before the acquisition. Hereinafter the same shall apply.
(Note 5) “Occupancy rate” for the hotel properties is calculated in accordance with the following formula:
Occupancy rate = total number of occupied rooms during a certain period ÷ total number of rooms available
during the same period (number of rooms x number of days)
Hereinafter the same shall apply.
(Note 6) “ADR” means average daily rate, and is calculated by dividing total room sales (excluding service fees) for acertain period by the total number of days per room for which each room was occupied during the same period.
Hereinafter the same shall apply.
(Note 7) “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 shall apply.
(Note 8) Based on the 60 residential properties owned as of the beginning of July 2020. Of the 60 properties, six
properties which are Nisshin Palacestage Higashi-Nagasaki, Nishiwaseda Cresent Mansion, Neo Prominence,
City Court Kitaichijo, Lexington Square Akebonobashi and Lexington Square Daitabashi were sold on
December 18, 2020. Therefore, for the six properties sold, July 1, 2020 through December 17, 2020 is deemedas the operating period for the December 2020 fiscal period, and the leased area and the leasable area as ofDecember 17, 2020 are deemed as them as of the end of December 2020 to calculate each number. Hereinafter
the same shall apply.
(Note 9) “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 the relevant
period.
(Note 10) 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 11) Renewal rate is calculated by the number of renewed contracts during the relevant period divided by the numberof contracts due up for renewal during the relevant period(Note 12) The 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.
The unrealized gain ratio is calculated using the following formula: the unrealized gain ÷ book value as of theend of the Reporting Period.
(Note 13) “GOP” means the gross operating profit, and is the amount remaining after deducting costs of hotel operations(the personnel, utility and advertising expenses and other expenses) and the management services fee tooperators (if any) from the hotel’s revenues. Moreover, GOP for the Sheraton Grande Tokyo Bay Hotel has
been multiplied by 49%, or INV’s ownership ratio of the preferred equity interest. Hereinafter the same shallapply.
(c)

Overview of Fund Raising

As a result of the measures described below, INV’s interest-bearing debt outstanding balance was JPY 262,588 million andthe Interest-Bearing Debt ratio (Note 1) and LTV (appraisal value basis) (Note 2) were 50.8% and 47.6% respectively, asof the end of the Reporting Period, with an average interest rate (Note 3) of 0.53%.

(Note 1)

(Note 2)

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- 18 -

(*)(Note 3)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 appraisal value of the Cayman Hotels is converted
into JPY amount via exchange rate of USD 1=JPY 110.45 based on the foreign exchange forward contracts
concluded on July 26, 2018 and executed on September 26, 2018.
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) Borrowing of Funds
INV borrowed New Syndicate Loan (R) on July 16, 2020 (total amount borrowed: JPY 28,979 million; interest rate:variable interest rate of 1-month JPY TIBOR plus 0.25000% for duration of one year), 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, 2020.
On July 20, 2020, INV borrowed Term Loan (N) (total amount borrowed: JPY 600 million; interest rate: variable interest
rate of 1-month JPY TIBOR plus 0.25000% for duration of two years), which was arranged by The Tokyo Star Bank,
Limited and Term Loan (O) (total amount borrowed: JPY 1,000 million; interest rate: variable interest rate of 1-month
JPY TIBOR plus 0.25000% for duration of one year), which was arranged by Development Bank of Japan, Inc. in orderto repay one of the tranches of Term Loan (E) in the amount of JPY 1,600 million due on July 20, 2020.
Furthermore, INV borrowed Term Loan (P) on September 14, 2020 (total amount borrowed: JPY 3,000 million; interest
rate: variable interest rate of 1-month JPY TIBOR plus 0.25000% for duration of one year), which was arranged by
Sumitomo Mitsui Banking Corporation in order to repay Term Loan (F) in the amount of JPY 3,000 million due on
September 14, 2020.
In addition, on October 13, 2020, INV borrowed New Syndicate Loan (S) (total amount borrowed: JPY 1,539.5 million;interest rate: variable interest rate of 1-month JPY TIBOR plus 0.25000% for duration of one year) , which was arranged
by Mizuho Bank, Ltd. and Term Loan (Q) (total amount borrowed: JPY 328.5 million; interest rate: variable interest rateof 1-month JPY TIBOR plus 0.25000% for duration of one year), which was arranged by Sumitomo Mitsui Trust Bank,
Limited in order to repay one of the tranches of New Syndicate Loan (H) in the amount of JPY 1,868 million due on
October 13, 2020.
(ii) Prepayment of Loan
INV’s short-term consumption tax loan (Note 1) in the New Syndicate Loan (P) (in the amount of JPY 880 million) was
prepaid on October 30, 2020 from the consumption tax refund concerning asset acquisitions on January 6, 2020 and cashon hand.
(Note 1) Short-term consumption tax loan is a loan which is to be repaid before the maturity date from a refund of
consumption taxes and regional consumption taxes on an acquisition of a properties.

- 19 -

(d)Overview of Sale of Assets

INV completed the sales of trust beneficiary interests in six residential assets as follows on December 18, 2020.

Property Name

Acquisition
Price(JPY million)

Book Value(JPY million)(Note 1)

A27

Nisshin
Palacestage
Higashi-Nagasaki

1,229

1,036

A53

Nishiwaseda
Cresent Mansion

1,880

1,882

Property
NumberA76

Neo Prominence

1,660

1,782

1,678

A54

Lexington Square
Akebonobashi

1,450

1,280

A71

Lexington Square
Daitabashi(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)

7,869

1,509

Transferee

Undisclosed(Note 5)City Court
Kitaichijo(Note 1)
(Note 2)Gain on Sale
(JPY million)(Note 2)
(Note 4)

1,585

A100

Total

Sale Price(JPY million)(Note 2)
(Note 3)

977

820

8,978

8,284

3,270

1,092

11,1392,602-

As of December 18, 2020.
The sale is a transaction under two purchase and sale agreements with different transferees, in which the six
properties of the sold assets are divided into groups of four properties (A27, A53, A76 and A100) and two
properties (A54 and A71). The sale price and gain on sale show the total amount of each of theabovementioned four properties and two properties. The sale prices of individual properties are not disclosed
as the transferees’ consent has not been obtained for disclosure. Accordingly, the gain on sales of individual
properties are not disclosed, either.
Sale prices show the total sale prices set forth in the purchase and sale agreements for the trust beneficiaryinterests of each of the four properties and two properties, and do not include adjustments for property taxes
or city planning taxes, or national or local consumption taxes.
Gain on sale is calculated by deducting the book value and the transfer related cost for each of the four
properties and two properties.
The names of the transferees are not disclosed, as the transferees’ consent has not been obtained for disclosure.
The trust beneficiary interest of Nisshin Palacestage Higashi-Nagasaki was integrated in a single account withother trust accounts when INV procured funds through debt financing backed by trust assets in July 2011.
Therefore, for the purpose of selling the trust beneficiary interests of the property by itself, INV has
implemented the procedures for the trust split effective on November 17, 2020 and recorded certain expenses.
For details on the debt financing backed by trust assets and the integration of trust accounts, please refer tothe press release “Notice concerning Fund Procurement through Debt Financing Backed by Trust Assets andRepayment of Borrowings and Change in Trustee of Trust Assets” dated July 15, 2011.
Amounts are rounded down to the nearest million yen.

- 20 -

(e)Overview of Results of Operations and Distributions

As a result of the operations mentioned above, operating revenues for the Reporting Period decreased by JPY 1,069
million from the previous period (-11.4%) to JPY 8,340 million, net income increased by JPY 199 million (47.1%) to
JPY 623 million and unappropriated retained earnings including the retained earnings carried forward from the preceding
fiscal period (JPY 12,747 million) reached JPY 13,371 million.
INV decided that distribution per unit (excluding excess profit distribution) is JPY 167, which is the net income per unit
(JPY 102) plus the reversal of retained earnings (JPY 65 per unit).

- 21 -

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
July 29, 2011
December 20, 2013

Type of issue
Third-party
allotment
Third-party
allotment

Total number of investment
units issued and outstanding

Unitholders’ capital (JPY)

Increase

Total

Increase

Total

711,597

1,348,292

6,999,979,689

26,134,396,789(Note 1)

224,887

1,573,179

2,999,992,580

29,134,389,369(Note 2)

Reference

July 16, 2014

Public offering

1,040,000

2,613,179

22,747,920,000

51,882,309,369(Note 3)

August 13, 2014

Third-party
allotment

55,5072,668,686

1,214,104,611

53,096,413,980(Note 4)

July 15, 2015

Public offering

500,000

3,168,686

27,970,500,000

81,066,913,980(Note 5)

August 12, 2015

Third-party
allotment

25,0003,193,686

1,398,525,000

82,465,438,980(Note 6)

March 30, 2016

Public offering

459,5123,653,198

36,123,157,344

118,588,596,324(Note 7)

22,626

3,675,824

1,778,675,112

120,367,271,436(Note 8)-3,675,824

224,225,264

120,591,496,700(Note 9)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 10)October 12, 2017

Public offering

887,959

4,748,783

37,917,625,218

166,902,571,918(Note 11)

November 1, 2017

Third-party
allotment

44,3984,793,181

1,895,883,396

168,798,455,314(Note 12)

August 1, 2018

Public offering

909,524

5,702,705

40,280,089,388

209,078,544,702(Note 13)

August 21, 2018

Third-party
allotment

45,476

5,748,181

2,013,995,612

211,092,540,314(Note 14)

December 28, 2018

Retirement(81,341)

5,666,840-

211,092,540,314(Note 15)

July 18, 2019

Public offering

409,524

6,076,364

23,317,887,036

234,410,427,350(Note 16)

Third-party
20,476
6,096,840
1,165,882,964
235,576,310,314 (Note 17)
allotment
Reversal of
allowance for
6,096,840
125,201,855
235,701,512,169 (Note 18)
temporaryAugust 22, 2019differences
adjustment(Note 1) 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 2) New investment units were issued in a third-party allotment at a price of JPY 13,340 per unit to makerepayment of existing loan, etc.
(Note 3) 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.
August 15, 2019- 22 -

(Note 4)

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 5) 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 6) 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 7) 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 8) 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 9) 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 10) 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 11) 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 12) 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 13) 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 14) 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 15) 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 16) 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 17) 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 18) 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.

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

PeriodClosing month
HighestLowest31st fiscal
periodDecember
2018
51,00044,80032nd fiscal
periodJune
201960,70044,30033rd fiscal
periodDecember
2019
70,60055,700- 23 -

34th fiscal
periodJune
2020
62,30018,870(Unit: JPY)
35th fiscal
periodDecember2020
39,80023,5004Distribution PerformanceWith respect to distributions of earnings for the Reporting Period, INV decided that distribution per unit (excluding excess
profit distribution) is JPY 167 and does not make distributions in excess of profits.

PeriodCalculated Period
Unappropriatedretained 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 ofinvestment(JPY thousand)(Refund of investment
per unit)(JPY)
Total distribution fromthe allowance fortemporary differences
adjustment out of total
refund of investment(JPY thousand)(Distribution from theallowance fortemporary differences
adjustment per unit outof refund of investment
per unit) (JPY)
Total distribution fromunitholders’ equity
under the tax laws outof the total refund ofinvestment(JPY thousand)Distribution fromunitholders’ equity
under the tax laws outof refund of investment
per unit(JPY)

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

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

33rd fiscal
periodJul. 1, 2019 toDec. 31, 201934th fiscal
periodJan. 1, 2020 toJun. 30, 2020

35th fiscal
periodJul. 1, 2020 toDec. 31, 2020

9,140,372

21,131,966

23,261,426

13,168,294

13,371,340-107,910

11,622,477

12,744,377

12,747,612

12,353,168

9,537,291

9,384,287

10,517,049

420,6811,018,172(1,683)(1,656)(1,725)

(69)

(167)

9,248,282

9,384,287

10,517,049

420,6811,018,172(1,632)(1,656)(1,725)

(69)

(167)

289,008

-

-

-

-

(51)

(-)

(-)

(-)

(-)

85,002

-

-

-

-

(15)

(-)

(-)

(-)

(-)

204,006

-

-

-

-

(36)

(-)

(-)

(-)

(-)

- 24 -

5

Future operational policy and issues to be addressed
Outlook for the Fiscal Periods Ending June 30, 2021
From the next fiscal period onward, the Japanese economy is expected to begin a gradual recovery from the severe
situation caused by COVID-19 once the nationwide vaccination process gets underway. However, the third wave of
COVID-19 infections caused a suspension in the program, the government issuance of another state of emergency andthe suspension of inbound travel by foreigners. Similar trends can be seen overseas and harsh conditions are expected
to continue, with a risk that the overall economy will deteriorate causing a further rise in the unemployment rate.
Therefore, it is necessary to closely monitor the impact of COVID-19 infections in Japan and overseas, variables in thefinancial and capital markets, and other factors.
The worldwide spread of COVID-19 has had a significant impact on hotel revenues. At this point in time, it remains
difficult to predict the spread of COVID-19 and its impact on the hotel industry and operators. Therefore, the forecastof financial results for the June 2021 fiscal period remains undetermined.
(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. Fortress Group became a member 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 tocontinued 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 and robotics.
INV believes that deployment of technology into INV’s real estate assets, especially its hotels, will enhance the ongoing
initiatives to improve its digital marketing, minimize labor costs and increase customer engagement. For example, INV
plans to pursue opportunities to better manage online research, bookings and payments, improve the process in setting
hotel rates and manage overbooking through the use of sophisticated AI algorithms, and reduce labor costs while
enhancing customer service through the use of robotics.
In addition to pursuing synergies with SoftBank Group, INV will pay attention to an asset management with an emphasis
on customer safety and security in situations where accommodation demand has declined drastically due to the impact of
COVID-19, and focus on reviewing the operational strategy to restore revenues from hotels. Going forward, INV willcontinue to implement various strategies for further growth and financial stability, including the following measures.
Asset recycling: property acquisitions using the proceeds from salesInternal growth at hotels through reducing costs, stimulating existing demand and creating new demand bycollaborating with hotel operators

Further internal growth at residential properties

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

External growth strategy
New Property Acquisitions

As its basic strategy, INV had moved forward with the acquisition of new properties focusing on hotels, where continued
growth in portfolio revenues would be anticipated and residential properties, especially where rental growth could beachieved, to build a portfolio with a good balance between growth and stability. However, for the time being, it isnecessary to carefully consider the acquisition of hotel properties, which have been greatly affected by the sluggish
demand for accommodation due to COVID-19, while looking for the possibility of acquiring at an attractive price.
In regard to hotels, INV will take into consideration demands of business and leisure customers in nearby areas, andleasing contract types when making investment decisions, with the aim of acquiring properties where growth and stabilityof GOP and rental revenue are forecasted to increase.

- 25 -

In regard 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.
Property Sales
INV considers the possibility of portfolio optimization upon consideration of the portfolio sector composition, geographic
distribution and competitiveness of each property as appropriate in the sluggish accommodation demand due to the impact
of COVID-19.
(ii) Strategy for internal growth(Hotels)
Of the 84 domestic hotels (Note 1) owned by INV as of the end of the Reporting Period, 75 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 73 hotels of the 75 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.
In response to the significant reduction in hotel demand, the MHM Group is taking steps to reduce hotel operating
expenses by reviewing its operational strategy. Specific measures include temporary hotel closures and the suspensionof non-essential capital expenditures as well as taking government subsidies, cutting payments to service providers suchas cleaning vendors, significantly reducing marketing expenses, utilities and other items under the COVID-19
environment. The MHM Group is vigorously working to stimulate demand from existing domestic customers byfollowing up on cancelled or postponed functions and providing corporate customers with various options including new
lineup of meeting options highlighting strict measures to reduce the spread of COVID-19. In addition, the MHM Groupis focusing on creating new demand, including the provision of day-use telework environments to provide individuals
and corporates with a comfortable telework space as well as accommodation demand associated with the 14-day voluntary
quarantine period after returning to Japan.
For hotels, renovation of rooms and replacement of fixtures and fittings are indispensable to maintain and increase
revenues and operate stably in a planned manner while considering the hotel profit situation, where demand has dropped
significantly as described above.
(Residential properties and others)
INV will continue to strengthen its collaborative ties with property managers and brokers to further boost occupancy rates
and earning capabilities of its properties. With respect to INV’s residential properties, INV will focus on increasing theoccupancy rates and rents for both new 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 outlook from Japan Credit Rating Agency, Ltd. (JCR) has been changed as described on the following
page as of December 14, 2020. As it is difficult to predict when the outbreak of COVID-19 will come to an end, for thetime being INV will implement initiatives that restrict an increase in interest payments on refinancing of existing- 26 -

borrowings and ensure refinancing. Over the medium to long term, INV will implement financial strategies such as
reduction of borrowing costs, extension of average interest-bearing debt repayment periods, diversification of loan
maturity dates and financing measures.
Credit Rating Object

Before Change

After Change

Long-term Issuer Rating

A+

A+(Outlook)(Stable)(Negative)(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.
(v)

Initiatives for Sustainability

INV and CIM recognize the importance of environmental, social, and governance (ESG) considerations in real estate
investment management from the viewpoint of sustainability such as economic and social development and contributing
to global environmental conservation, and regard improvement of sustainability as an important management issue.
INV and CIM believe that the incorporation of ESG considerations into the real estate investment management business,
which is our primary business, is essential to maximizing unitholder value over the medium to long term and contributes
to maximizing INV's investment returns.
Thus, INV and CIM have established a “Sustainability Policy” to set basic policies for sustainability and put them into
practice in our daily operations. Under this policy, CIM has formulated the “Energy Conservation Policy”, which
stipulates efforts to improve energy consumption management and energy efficiency in the real estate investment
management business, and the “Greenhouse Gas Emissions Reduction Policy”, which stipulates an operation policy to
reduce carbon emissions. In addition, in order to promote initiatives for ESG throughout the value chain of INV's realestate portfolio, CIM has established the Sustainable Procurement Policy to set guidelines in the real estate investment
management business, pertaining to the content of construction ordered, the criteria for selecting goods to be procured inconnection with construction, and the criteria for selecting and evaluating business partners (suppliers). Furthermore,
CIM has conducted sustainability-focused training for all officers and employees, including temporary staff, at least oncea year. The purpose of this training is to help officers and employees acquire knowledge and raise awareness ofsustainability considerations in line with business practices.
As the COVID-19 pandemic continues, APA Hotel Yokohama-Kannai has been used as an accommodation and medical
facility for people with mild COVID-19 cases since August 2020 in terms of initiatives for society.
INV will continue to recognize its social responsibility to the environment and local communities as a J-REIT with hotels
and residences as our core assets, and will proactively implement ESG-friendly investment management andsustainability initiatives that take advantage of asset characteristics and carry out social contribution activities.

- 27 -

6

Significant Subsequent Events
Not applicable. Reference Information is described as follows.

(Reference Information)(a)Prepayment of Loans

The Prepayment was implemented on January 29, 2021 to all lenders on a pro-rata basis by using JPY 10,000 million, amajority of the sales proceeds of the six residential properties sold on December 18, 2020.
Status of Loans Subject to Prepayment after the Prepayment (Note 1)(As of January 29, 2021)
Borrowing
Loan/Lender(s)Date

New Syndicate Loan(F)
<5-Year Loan>
Mizuho Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui
Trust Bank, Limited
Shinsei Bank,
LimitedThe Hiroshima Bank,Ltd.
The Kagawa Bank,Ltd.
The Bank ofFukuoka, Ltd.
The Shizuoka Bank,
Ltd.
Resona Bank,
LimitedThe Nomura Trustand Banking Co., Ltd.
New Syndicate Loan(G)
<4-Year Loan>
Mizuho Bank, Ltd.
Resona Bank,
LimitedThe Bank ofFukuoka, Ltd.
The Nomura Trustand Banking Co., Ltd.
The Shizuoka Bank,Ltd.
The Towa Bank, Ltd.
The Gunma Bank,Ltd.

March 31,2016

BalancebeforeRepayment(JPY million)

10,433

Repayment
Amount(JPY million)

4,037

Balanceafter
Repayment(JPY million)

6,396InterestRate(annual)0.68818%(Note 2)

Maturity

Borrowing

Date

MethodMar. 30,
2021

Unsecured/nonguaranteed

March 14,
2017

3,250

2,323

- 28 -

927

0.58818%(Note 2)Mar. 14,2021

Borrowing
Loan/Lender(s)Date

New Syndicate Loan(K)
<3-Year Loan>
Mizuho Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui
Trust Bank, Limited
Shinsei Bank,
LimitedResona Bank,
LimitedDevelopment Bank ofJapan, Inc.
The Bank ofFukuoka, Ltd.
The Shizuoka Bank,Ltd.
The Nomura Trustand Banking Co., Ltd.
The Senshu Ikeda
Bank, LtdNew Syndicate Loan(K)
<5-Year Loan>
Aozora Bank, Ltd
The Nishi-Nippon
City Bank, Ltd.
The Tochigi Bank,Ltd.
New Syndicate Loan
(K)
<10-Year Loan>
Kiraboshi Bank, Ltd.
New Syndicate Loan
(L)
<4.5-Year Loan>
Mizuho Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Sumitomo Mitsui
Trust Bank, Limited
Citibank, N.A.,Tokyo
BranchDevelopment Bank ofJapan, Inc.
AEON Bank, Ltd.
Aozora Bank, Ltd
The Nomura Trustand Banking Co., Ltd.

BalancebeforeRepayment(JPY million)

Repayment
Amount(JPY million)

Balanceafter
Repayment(JPY million)

InterestRate(annual)Maturity

Borrowing

Date

MethodMar. 29,2022

March 29,
2019

7,934

12

7,922

March 29,
2019

2,500

99

2,401

0.59400%(Note 3)Mar. 29,2024

March 29,
2019

1,000

39

961

0.88818%(Note 2)Mar. 29,
2029

July 19,
2019

4,943

138

4,805

- 29 -

0.36100%(Note 3)0.52473%(Note 3)Jan. 16,2024

Borrowing
Loan/Lender(s)Date

New Syndicate Loan(N)
<4.4-Year Loan>
Mizuho Bank, Ltd.
The Daisan Bank,Ltd.
New Syndicate Loan(P)
<5-Year Loan>
Sumitomo Mitsui
Trust Bank, Limited
Momiji Bank,Ltd.
The Kiyo BankNew Syndicate Loan
(Q)
<5-Year Loan>
Mizuho Bank, Ltd.
Resona Bank,
LimitedDevelopment Bank ofJapan, Inc.
The Bank ofFukuoka, Ltd.
The Nomura Trustand Banking Co., Ltd.
The Shizuoka Bank,Ltd.
The Yamaguchi Bank,Ltd.
New Syndicate Loan
(Q)
<5-Year Loan>
Mizuho Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui
Trust Bank, Limited
Shinsei Bank,
LimitedResona Bank,
LimitedThe Nomura Trustand Banking Co., Ltd.
Aozora Bank, Ltd
The Shizuoka Bank,Ltd.
The Kagawa Bank,Ltd.
The Yamaguchi Bank,Ltd.
The Chukyo Bank,
Ltd.

BalancebeforeRepayment(JPY million)

Repayment
Amount(JPY million)

Balanceafter
Repayment(JPY million)

InterestRate(annual)Maturity

Borrowing

Date

MethodAugust 28,
2019

3,682

138

3,544

0.46219%(Note 3)Jan. 16,2024

January 6,
2020

4,550

59

4,491

0.64291%(Note 3)Jan. 6,2025

March 16,
2020

3,250

39

3,211

0.48700%(Note 3)

March 30,
2020

6,960

39

6,921

0.58818%(Note 2)- 30 -

Mar. 16,2025

Mar. 16,2025

Borrowing
Loan/Lender(s)Date

New Syndicate Loan(R)
<1-Year Loan>
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Shinsei Bank,
Limited
Citibank, N.A.,Tokyo
BranchSumitomo Mitsui
Trust Bank, Limited
Resona Bank,
LimitedTerm Loan (C)<5-Year Loan>
Citibank, N.A.,Tokyo
BranchTerm Loan (D)<5-Year Loan>
AEON Bank, Ltd.
Term Loan (E)<5-Year Loan>
The Tokyo Star Bank,
LimitedTerm Loan (G)<4.5-Year Loan>
Mizuho Bank, Ltd.
The Dai-ichi Life
Insurance Company,
LimitedTerm Loan (O)<1-Year Loan>
Development Bank ofJapan, Inc.
Total

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

BalancebeforeRepayment(JPY million)

Repayment
Amount(JPY million)

Balanceafter
Repayment(JPY million)

InterestRate(annual)Maturity

Borrowing

Date

MethodJuly 16,2020

28,9791,550

27,429June 15,
2016

1,000

651

349

0.68818%(Note 2)

Jun. 15,2021

June 30,
2016

3,000

267

2,733

0.68818%(Note 2)

Jun. 30,
2021

July 20,
2016

1,700

118

1,582

0.68818%(Note 2)

Jul. 20,2021

May 29,
2017

7,321

157

7,164

0.63818%(Note 2)

Nov. 29,
2021

July 20,
2020

1,000

334

666

0.33818%(Note 2)

Jul. 20,2021

91,502

10,00081,502

0.33818%(Note 2)

Jul. 16,
2021

Of the loans that are subject to prepayment, only the tranches that are eligible for prepayment are listed.
The interest rate applicable as of January 20, 2021 is shown.
Figure is shown as virtually fixed interest rate because interest rate is fixed by interest rate swap agreement
while it is a borrowing with floating interest rate.

- 31 -

(b)Debt Financing

INV decided to borrow Term Loan (R) and Term Loan (S) on January 20, 2021 in order to repay Term Loan (B) in theamount of JPY 4,250 million due on January 22, 2021.
(i)

Term Loan (R)LenderSumitomo Mitsui Banking
Corporation(Note 1)
(ii)

Borrowing
Date

Outstanding
Balance(JPY million)

Interest Rate(annual rate)

Maturity
Date

Borrowing
MethodJanuary 22,
2021

3,400

Floating
interest rates(Note 1)January 22,2022

Unsecured/ nonguarantee

1-month JPY TIBOR (Base Rate) + spread (0.25000%)

Term Loan (S)LenderBorrowing
Date

Outstanding
Balance(JPY million)

Interest Rate(annual rate)

Maturity
Date

Borrowing
MethodMUFG Bank, Ltd.

January 22,
2021

850

Floating
interest rates(Note 1)January 22,2022

Unsecured/ nonguarantee(Note 1)

1-month JPY TIBOR (Base Rate) + spread (0.25000%)- 32 -

Overview of the Investment Corporation
1

Overview of Investment
By Period
Results Dates

31st fiscal
periodAs of Dec. 31,
2018

32nd fiscal
periodAs of Jun. 30,
201933rd fiscal
periodAs of Dec. 31,
201934th fiscal
periodAs of Jun. 30,
202035th fiscal
periodAs of Dec. 31,
2020

10,000,000

10,000,000

10,000,000

10,000,000

10,000,000

5,666,840

5,666,840

6,096,840

6,096,840

6,096,840

211,092

211,092

235,701

235,701

235,701

35,22832,64534,62642,43938,074

Number of issuable
investment units(Unit)
Number ofinvestment units
issued andoutstanding(Unit)
Unitholders’ capital(JPY million)
Number of total
unitholders
2

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

Name

Number of units held

The Master Trust Bank of Japan, Ltd.
(trust account)
Custody BANK of Japan, Ltd.
(trust account)
The Nomura Trust and Banking Co., Ltd.
(investment trust account)
Custody BANK of Japan, Ltd.
(security investment trust account)
STICHTING PGGM DEPOSITARY PGGM
LISTED REAL ESTATE PF FUND
STATE STREET BANK AND TRUSTCOMPANY 510312
STATE STREET BANK AND TRUSTCOMPANY 510311
THE BANK OF NEW YORK MELLON
140044FJODF GP INV HOLDINGS LLCNORTHERN TRUST CO. (AVFC) RE
MONDRIAN INTERNATIONAL SMALLCAP EQUITY FUND , L.P.
Total
(Note 1)

Percentages are rounded down to two decimal places.

- 33 -% of total number of investment
units issued and outstanding

956,17815.68

577,733

9.47

286,058

4.69

225,424

3.69

224,830

3.68

152,589

2.50

142,4112.33

136,940

2.24

115,9311.90

109,427

1.79

2,927,521

48.01

3

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

Position

Executive Director

Name

Naoki Fukuda

Yoshihiro Tamura

Supervisory Director
Hiroyuki Fujimoto

Auditor(Note)

Concurrent responsibilities
President and CEO,
Consonant Investment
Management Co., Ltd.
(current position)
Attorney,
Shiba-Daimon Law Office
Statutory Auditor,
BEQONE PARTNERS, Inc.
(current position)
Certified Public Accountant,
CPA Fujimoto OfficeOutside Auditor,
BRYCEN Co., Ltd.
(current position)
Outside Director, the Audit &Supervisory Committee
Member,NEO MARKETING INC.
(current position)

Ernst & Young
ShinNihon LLC-

Directors’ remunerationfor operating period(JPY thousand)
-

2,400

2,400

17,700Executive 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.

- 34 -

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.

- 35 -

Status of Investment Corporation’s Assets under Management
1

Composition of INV’s Assets

Type ofasset

Geographic area

PurposeReal
estateHotels(Note 1)
Greater Tokyo
Area (Note 3)
Major regional
citiesOverseas (Note 4)
Subtotal

Total real estate

Residences

Greater Tokyo area
Major regional
citiesSubtotal

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

Fiscal period ended June 30, 2020(as of June 30, 2020)
Amount held
(JPY million)(Note 2)

Fiscal period ended December 31, 2020(as of December 31, 2020)

Percentage of
total assets(%)

Amount held
(JPY million)(Note 2)

Percentage of
total assets
(%)

2

0.0

2

0.0

-

-

-

-

35,527

6.9

35,136

6.8

35,5306.9

35,1396.8

35,5306.9

35,1396.8

35,8806.9

29,098

5.6

15,023

2.9

13,194

2.6

50,9049.9

42,293

8.2

-

-

-

-

4,738

0.9

4,689

0.9

4,738

0.9

4,689

0.9

171,17033.1

170,27033.0

214,91241.6

213,16141.3

386,08274.7

383,431

74.2

Total real estate in trust

441,72585.5

430,414

83.3

Preferred equity interest (Note 5)

17,856

3.5

17,856

3.5

Deposits and other assets

21,5504.2

33,0806.4

516,663100.0

516,490100.0(477,256)(92.4)(465,553)(90.1)

HotelsGreater Tokyo area
Major regional
citiesSubtotal

Total assets (Note 6)(Note 1)
(Note 2)

(Note 3)(Note 4)(Note 5)(Note 6)

“Greater Tokyo area” refers to Tokyo, Kanagawa, Chiba and Saitama.
“Amount held” is from the balance sheet as of the end of the reporting period (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.
While Hotel MyStays Haneda is held as trust beneficiary interests, part of accompanying FF&E is held in kind,which falls under this category.
The Leasehold of the Cayman Hotels falls under the category of “Real estate” for “Overseas.” The leaseholdinterests 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 todirectly owning the Leasehold of the Cayman Hotels, which are the underlying assets of the TK interest.
Preferred equity interest issued by Kingdom Special Purpose Company, with the Sheraton Grande Tokyo Bay Hotelas 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).
The figures indicated in parenthesis under “Total assets” show the amounts related to owned real estate (excluding
the amount of preferred equity securities owned).

- 36 -

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(JPY million)

Leasable area(m2)
(Note 2)

Leased area(m2)

Occupancy rate

Ratio of(%)

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

29,476

21,528.23

21,528.23

100.0

-

Hotel

D43

Hotel MyStays Gotanda Station

26,30910,137.88

10,137.88

100.0

1.0

Hotel

D60

Hotel MyStays Premier Akasaka

20,4138,620.69

8,620.69

100.0

0.2

Hotel

D44

Hotel Epinard Nasu

19,39437,702.33

37,702.33

100.0

14.8

Hotel

D61

Hotel MyStays Premier Sapporo Park

16,26821,670.64

21,670.64

100.0

0.5

Hotel

D64

Hotel MyStays Sapporo Aspen

15,39915,313.17

15,313.17

100.0

0.2

Hotel

12,88913,026.99

13,026.99

100.0

0.3

Hotel

D50

Hotel MyStays Shin Osaka ConferenceCenterD47

Hotel MyStays Premier Kanazawa

12,80013,250.03

13,250.03

100.0

2.6

Hotel

D82

Hotel MyStays Premier Narita

10,39636,519.70

36,519.70

100.0

3.7

Hotel

D51

Hotel MyStays Premier Omori

9,723

11,849.61

11,849.61

100.0

0.5

Hotel

173,071

189,619.27

189,619.27

100.0

23.8

Total

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

Securities described in “6 Asset Portfolio of Securities” later in this document are excluded.
Leasable area of Westin Grand Cayman Seven Mile Beach Resort & Spa indicates the area subject tomanagement contract.
“Occupancy rate” is calculated by dividing the leased area by leasable area, and rounded to one decimal place.
“Ratio of rental revenue” are rounded to one decimal place.

- 37 -

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)

Type of asset

A26

Nisshin Palacestage
Daitabashi

1-31-2 Izumi, Suginami-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

A45

Wacore Tsunashima I

2-7-47 Tarumachi, Kohoku-ku,
Yokohama-shi, Kanagawa- 38 -

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beneficiaryinterest(Note 4)

Leasable area(m2) (Note 2)

Appraisal value
as of the end ofBook value
the Reporting(JPY
Periodmillion)(JPY million)(Note 3)

1,771.13

1,230

1, 087

1,051.50

1,040

830

1,367.96

1,170

944

2,152.31

1,430

1,314

3,029.16

1,110

1,051

1,858.44

1,180

926

1,351.11

1,090

917

1,562.26

1,010

787

1,015.34

784

720

1,368.57

675

631

1,167.50

669

697

1,235.93561

651

1,210.74769

512

1,047.75

507

560

557.05632

545

907.46527

513

Name of property

Location(Note 1)

Type of asset

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

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, Nagoyashi, Aichi

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

A77

Invoice Shin-Kobe
Residence

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

A78

Cosmo Court Motomachi

3-12-20 Motomachidori, Chuo-ku,
Kobe-shi, Hyogo

A79

Revest Honjin

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

A80

Revest Matsubara

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

A82

Alba Noritake Shinmachi

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

A83

Revest Meieki Minami

2-13-33 Meieki-Minami, Nakamuraku, 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- 39 -

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Leasable area(m2) (Note 2)

Appraisal value
as of the end ofBook value
the Reporting(JPY
Periodmillion)(JPY million)(Note 3)815.77589

498

2,040.27

521

530

871.35567

434

1,627.13

1,280

797

1,220.24

848

564

3,426.36

1,440

1,007

1,929.59

679

382

1,528.58

425

267

705.75296

228

784.74668

414

4,460.56

1,240

892

2,773.71

1,510

1,113

2,310.49

1,170

847

1,933.80858

581

1,955.40

879

571

1,731.68

784

523

1,634.60

813

511

1,554.03760

514

2,670.66814

490

1,428.12

681

475

701.92714

497

Name of property

Location(Note 1)

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, andother two 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, Kobeshi, Hyogo

A95

HERMITAGE NANBA
WEST

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

A96

Century Park Shinkawa 1bankan

4-1-2 Shinkawacho, Minato-ku,
Nagoya-shi, 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

A101

Lieto Court Mukojima

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

A102

Lieto Court Nishi-Ojima

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

A103

Royal Parks Momozaka

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

A104

Royal Parks Shinden

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

A106

Royal Parks Seasir MinamiSenju

3-41-7 Minami-Senju, Arakawa-ku,
TokyoType of asset

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Subtotal
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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Subtotal
D01

Hotel MyStays Kanda

1-2-2 Iwamotocho, Chiyoda-ku,Tokyo- 40 -

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Leasable area(m2) (Note 2)

Appraisal value
as of the end ofBook value
the Reporting(JPY
Periodmillion)(JPY million)(Note 3)

1,185.50618

463

1,433.35

653

442

765.18705

418

1,029.05

551

396

530.60583

380

1,020.86

465

338

789.12489

332

992.76477

314

1,477.62473

306

794.80350306974.81421

276

761.18352

265

2,940.20

2,050

1,632

2,048.28

2,010

1,580

8,776.26

3,290

2,657

15,797.29

5,870

4,746

6,496.86

2,960

2,596

108,572.68

54,23742,2938,419.15

3,660

2,980

18,440.58

2,380

1,708

26,859.73

6,040

4,689

2,585.72

4,920

2,897

Name of property

Location(Note 1)

Type of asset

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

D17

Hotel MyStays Otemae

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

D18

Hotel MyStays
Kiyosumi Shirakawa

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- 41 -

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Leasable area(m2) (Note 2)

Appraisal value
as of the end ofBook value
the Reporting(JPY
Periodmillion)(JPY million)(Note 3)

3,327.38

4,410

2,500

7,241.51

9,960

5,710

6,232.30

7,200

4,539

2,456.36

6,770

4,659

9,445.32

6,650

3,659

9,064.71

5,530

2,572

4,188.83

4,000

2,320

7,379.43

3,890

2,260

1,719.29

2,510

1,776

3,412.71

5,560

1,443

2,953.38

2,090

1,335

1,150.76

2,010

1,220

1,134.52

1,980

1,187

2,539.75

2,140

1,190

2,089.86

2,260

1,099

4,956.66

2,430

1,124

2,673.64

1,500

876

770.56803

557

391.49387

282

6,568.51

9,930

7,530

7,961.26

3,900

2,735

1,754.06

2,360

2,076

Name of property

Location(Note 1)

Type of asset

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

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 5)

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- 42 -

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Leasable area(m2) (Note 2)

Appraisal value
as of the end ofBook value
the Reporting(JPY
Periodmillion)(JPY million)(Note 3)5,400.16

8,590

7,185

4,349.67

7,370

5,313

2,247.92

3,760

3,644

2,793.99

4,920

3,535

3,559.81

2,380

2,091

1,403.89

1,940

1,580

1,714.53

1,300

1,264

11,733.23

1,990

1,207

1,190.57

1,110

891

3,305.64

1,160

902

725.60890

871

3,932.93

4,580

4,805

1,832.97

1,240

1,088

1,279.16

1,210

1,070

1,942.01

2,580

3,006

3,207.60

1,240

1,039

3,660.96

1,120

1,001

3,099.90

1,090

927

3,009.50

923

771

10,137.88

23,90026,30937,702.33

22,70019,394

5,083.06

8,110

7,829

Location(Note 1)Name of property

Type of asset

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

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

Sapporo- 43 -

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Leasable area(m2) (Note 2)

Appraisal value
as of the end ofBook value
the Reporting(JPY
Periodmillion)(JPY million)(Note 3)

1,951.90

6,220

7,878

13,250.03

12,80012,8007,148.17

2,240

2,103

6,151.93

10,300

7,988

13,026.99

12,80012,88911,849.61

9,620

9,723

19,422.08

8,670

8,018

7,267.88

8,180

7,686

4,501.18

5,250

5,174

7,563.60

2,670

2,661

14,826.30

2,630

2,566

3,254.69

1,560

1,509

1,839.77

3,920

4,055

3,844.64

3,310

3,206

8,620.69

23,20020,413

21,670.64

16,10016,2684,396.02

5,110

5,190

3,429.43

3,920

4,902

15,313.17

14,90015,39917,247.54

9,290

9,605

5,498.49

9,750

9,104

6,509.41

5,670

5,761

Location(Note 1)Name of property

Type of asset

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

Leasable area(m2) (Note 2)

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 lots

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

D82

Hotel
Narita40 Yokomine Oyama, Narita-shi,
Chiba, and 14 other lots

D83

Art Hotel Morioka

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

D200

Westin Grand Cayman
Seven Mile Beach Resort &Spa

30620 Seven Mile Beach Road, Grand
Cayman, Cayman Islands

The
Leasehold21,528.23

D201

Sunshine Suites Resort

1465 Esterley Tibbetts Highway,
Grand Cayman, Cayman Islands

The
Leasehold6,723.11

MyStays

NagoyaPremierAppraisal value
as of the end ofBook value
the Reporting(JPY
Periodmillion)(JPY million)(Note 3)

5,931.84

5,410

5,645

10,403.01

5,340

5,476

6,077.99

5,110

5,138

6,047.43

4,050

4,213

7,659.55

3,390

3,390

25,131.84

3,040

3,043

8,274.37

3,160

2,975

2,853.26

2,970

3,024

5,473.41

2,060

2,072

1,775.21

1,520

1,552

1,308.61

1,450

1,410

2,156.70

1,260

1,278

2,047.70

1,190

1,155

1,985.27932

921

36,519.70

10,200

10,396

16,727.08

5,400

5,533

32,788(USD 316,800
thousand)(Note 6)
5,909
(USD 57,100
thousand)(Note 6)29,476

5,660

Subtotal

572,519.79

470,583

418,570Total

707,952.20

530,860

465,553(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.

- 44 -

(Note 3) “Appraisal value as of the end of the Reporting Period” is the value appraised or researched by Asset Research andDevelopment 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 andthe regulations of 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, 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) “Appraisal value as of the end of the Reporting Period” indicates appraisal value calculated deeming the owned
portion and the floor expansion portion as one.
(Note 6) “Appraisal value as of the end of the Reporting Period” is converted into JPY using the exchange rate of USD 1 =JPY 103.50, which is the exchange rate on the closing date of the fiscal period (December 31, 2020).

- 45 -

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

Name of property

A26
A27

Nisshin Palacestage
Daitabashi
Nisshin Palacestage
Higashi- Nagasaki (Note 4)

34th fiscal period

35th fiscal period(January 1, 2020 to June 30, 2020)
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)

(July 1, 2020 to December 31, 2020)
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)

1

95.2

40,612

0.7

1

88.2

38,050

0.7

1

97.1

47,4660.8--

44,0510.8

A28

Growth Maison Gotanda

1

100.0

27,694

0.5

1

100.0

27,7080.5

A29Growth Maison Kameido

1

97.0

35,652

0.6

1

97.0

35,295

0.6

A30

Emerald House

1

98.9

50,047

0.9

1

93.8

41,9000.7

A32

Suncrest Shakujii-Koen

1

94.9

37,543

0.6

1

94.1

38,160

0.7

1

92.6

38,123

0.7

1

94.0

37,260

0.6

1

96.8

36,452

0.6

1

90.5

30,727

0.5

A33
A34

Growth Maison ShinYokohama
Belle Face UenoOkachimachi

A35

Grand Rire Kameido

1

100.0

26,619

0.5

1

100.0

26,6190.5

A37Growth Maison Yoga

1

89.8

23,185

0.4

1

94.9

23,025

0.4

A38

Route Tachikawa

1

100.0

21,713

0.4

1

100.0

21,956

0.4

A39

Shibuya-Honmachi Mansion

1

95.5

20,937

0.4

1

100.0

21,4670.4

A40City Heights Kinuta

1

83.8

16,772

0.3

1

83.8

16,726

0.3

1

93.0

26,068

0.4

1

98.2

25,071

0.4

A41

Acseeds Tower KawaguchiNamiki

A43

College Square Machida

1

100.0

17,046

0.3

1

100.0

16,6090.3

A44

Belair Meguro

1

100.0

17,678

0.3

1

91.9

16,6090.3

A45

Wacore Tsunashima I

1

94.1

18,796

0.3

1

95.9

18,6290.3

A46

Foros Nakamurabashi

1

92.6

18,987

0.3

1

95.1

18,5370.3

A47

Growth Maison Kaijin

1

94.9

22,584

0.4

1

91.2

22,400

0.4

A48

College Square Machiya

1

100.0

14,924

0.3

1

100.0

14,924

0.3

-

-

7,118

0.1

-

-

-

-

1

100.0

75,734

1.3--

71,152

1.2

1

95.4

51,7420.9--

46,241

0.8

1

95.2

36,558

0.6

1

96.4

36,213

0.6

A51
A53
A54
A59

City House Tokyo Shinbashi(Note 5)
Nishiwaseda Cresent
Mansion (Note 4)
Lexington Square
Akebonobashi (Note 4)
Towa City Coop ShinotsukaII- 46 -Name of property

34th fiscal period

35th fiscal period(January 1, 2020 to June 30, 2020)
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)

(July 1, 2020 to December 31, 2020)
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)

A61

Bichsel Musashiseki

1

90.0

24,009

0.4

1

94.3

22,996

0.4

A63

Towa City Coop Sengencho

1

89.9

57,222

1.0

1

88.4

57,066

1.0

A64Royal Park Omachi

1

89.4

25,599

0.4

1

81.1

22,914

0.4

1

92.1

16,878

0.3

1

92.4

16,408

0.3

1

100.0

9,997

0.2

1

100.0

11,659

0.2

1

93.0

34,1370.6――

30,425

0.5

1

93.9

18,758

0.3

1

97.0

18,697

0.3

A65
A66
A71
A72

Lexington Square
Haginomachi
Visconti Kakuozan
Lexington Square Daitabashi(Note 4)
Lexington Square Honjo
Azumabashi

A73

AMS TOWER Minami 6-Jo

1

86.0

46,320

0.8

1

86.1

42,972

0.7

A76

Neo Prominence (Note 4)

1

95.0

68,847

1.2――

61,466

1.1

A77

Invoice Shin-Kobe Residence

1

96.3

50,169

0.9

1

94.5

49,1930.9

A78

Cosmo Court Motomachi

1

97.7

38,377

0.7

1

98.8

39,291

0.7

A79

Revest Honjin

1

92.5

30,330

0.5

1

96.2

31,326

0.5

A80

Revest Matsubara

1

93.7

28,822

0.5

1

80.6

26,307

0.5

A82

Alba Noritake Shinmachi

1

95.2

26,944

0.5

1

90.3

25,634

0.4

A83

Revest Meieki Minami

1

90.5

26,705

0.5

1

75.9

23,754

0.4

A84

Revest Heian

1

93.6

23,820

0.4

1

93.6

23,5460.4

A85

Vendir Hamaotsu Ekimae

1

95.3

34,983

0.6

1

97.8

35,107

0.6

A86

Salvo Sala

1

92.0

24,717

0.4

1

91.1

22,8280.4

A87

Excellente Kagurazaka

1

94.2

20,015

0.3

1

82.4

17,8870.3

A88

Luna Court Edobori

1

96.0

21,204

0.4

1

90.1

19,9840.3

A89

Winntage Kobe Motomachi

1

91.3

22,399

0.4

1

90.8

21,6420.4

A90

Queen's Court Fukuzumi

1

96.6

18,161

0.3

1

93.1

17,341

0.3

A91

Corp Higashinotoin

1

93.3

18,903

0.3

1

93.3

18,174

0.3

A92

Belair Oimachi

1

92.6

16,147

0.3

1

84.8

15,2700.3

A93

Siete Minami-Tsukaguchi

1

100.0

17,746

0.3

1

97.5

17,502

0.3

1

100.0

15,434

0.3

1

93.8

15,0670.3

A94

Prime Life Sannomiya
Isogami Koen

- 47 -Name of property

A95
A96

HERMITAGE NANBA
WEST
Century Park Shinkawa 1bankan

34th fiscal period

35th fiscal period(January 1, 2020 to June 30, 2020)
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)

(July 1, 2020 to December 31, 2020)
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)

1

88.0

15,999

0.3

1

87.2

14,460

0.3

1

97.7

18,277

0.3

1

97.7

18,3430.3

A97West Avenue

1

92.5

13,471

0.2

1

97.5

12,9950.2

A98

Little River Honmachibashi

1

100.0

14,743

0.3

1

84.6

12,6580.2

A99

Prime Life Mikage

1

96.7

12,624

0.2

1

100.0

12,5250.2

A100 City Court Kitaichijo (Note 4)

1

92.9

66,4691.1――

60,105

1.0

A101 Lieto Court Mukojima

1

99.0

56,899

1.0

1

96.4

56,786

1.0

A102 Lieto Court Nishi-Ojima

1

97.8

50,076

0.9

1

98.8

51,126

0.9

A103 Royal Parks Momozaka

1

96.0

161,353

2.8

1

96.0

161,328

2.8

A104 Royal Parks Shinden

1

100.0

216,531

3.7

1

100.0

217,186

3.8

1

97.7

118,525

2.0

1

94.9

118,702

2.1

60

95.6

2,211,691

37.9

54

94.2

2,130,029

37.1

A106

Royal Parks Seasir MinamiSenju
Subtotal

B17

Lexington Plaza Hachiman

1

98.5

160,501

2.7

1

98.5

159,025

2.8

B18

AEON TOWN Sukagawa

1

100.0

140,585

2.4

1

100.0

141,487

2.5

Subtotal

2

99.5

301,086

5.2

2

99.5

300,512

5.2

D01

Hotel MyStays Kanda

1

100.0

13,405

0.2

1

100.0

0

0.0

D02

Hotel MyStays Asakusa

1

100.0

19,987

0.3

1

100.0

2,942

0.1

D03

Hotel MyStays Kyoto-Shijo

1

100.0

30,445

0.5

1

100.0

5,394

0.1

1

100.0

36,106

0.6

1

100.0

9,145

0.2

1

100.0

32,293

0.6

1

100.0

41,855

0.7

1

100.0

58,998

1.0

1

100.0

28,925

0.5

1

100.0

41,786

0.7

1

100.0

9,840

0.2

1

100.0

13,295

0.2

1

100.0

0

0.0

D04
D05
D06
D07
D08

MyStays Shin-Urayasu
Conference Center
Hotel MyStays Maihama
Hotel MyStays Premier
DojimaHotel MyStays NagoyaSakae
Hotel MyStays SakaisujiHonmachi

D09

Hotel MyStays Yokohama

1

100.0

38,422

0.7

1

100.0

37,1660.6

D10

Hotel MyStays Nippori

1

100.0

12,226

0.2

1

100.0

726

0.0

1

100.0

19,300

0.3

1

100.0

3,223

0.1

D11

Hotel MyStays FukuokaTenjin-Minami- 48 -Name of property

D12
D13

Flexstay Inn Iidabashi
Hotel MyStays
Ueno Inaricho

34th fiscal period

35th fiscal period(January 1, 2020 to June 30, 2020)
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)

(July 1, 2020 to December 31, 2020)
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)

1

100.0

17,109

0.3

1

100.0

3,648

0.1

1

100.0

8,995

0.2

1

100.0

0

0.0

D14

Flexstay Inn Shinagawa

1

100.0

10,724

0.2

1

100.0

2,548

0.0

D15

Flexstay Inn Tokiwadai

1

100.0

35,160

0.6

1

100.0

3,664

0.1

D16

Flexstay Inn Sugamo

1

100.0

10,898

0.2

1

100.0

1,341

0.0

D17

Hotel MyStays Otemae

1

100.0

9,421

0.2

1

100.0

0

0.0

1

100.0

11,612

0.2

1

100.0

380

0.0

D18

Hotel MyStays Kiyosumi
Shirakawa

D19

Flexstay Inn Nakanobu P1

1

100.0

13,086

0.2

1

100.0

2,639

0.0

D20

Flexstay Inn Nakanobu P2

1

100.0

4,197

0.1

1

100.0

1,150

0.0

1

100.0

216,599

3.7

1

100.0

247,437

4.3

1

100.0

18,065

0.3

1

100.0

53,619

0.9

D21
D22

APA Hotel
Yokohama-Kannai
Hotel MyStays HakodateGoryokaku

D23

Flexstay Inn Shirogane

1

100.0

20,019

0.3

1

100.0

0

0.0

D24

Hotel MyStays Haneda

1

100.0

111,581

1.9

1

100.0

74,035

1.3

D25

Hotel MyStays Kameido P1

1

100.0

54,922

0.9

1

100.0

31,597

0.6

1

100.0

19,044

0.3

1

100.0

3,634

0.1

D26

Hotel MyStays Ueno
Iriyaguchi

D27

Hotel MyStays Kameido P2

1

100.0

31,796

0.5

1

100.0

20,3170.4

D28

Hotel MyStays Shimizu

1

100.0

22,250

0.4

1

100.0

27,732

0.5

1

100.0

39,426

0.7

1

100.0

39,426

0.7

D29Super Hotel
Shinbashi/Karasumoriguchi

D30

Flexstay Inn Higashi-Jujo

1

100.0

8,888

0.2

1

100.0

0

0.0

D31

Hotel MyStays Utsunomiya

1

100.0

19,247

0.3

1

100.0

31,138

0.5

1

100.0

21,574

0.4

1

100.0

3,832

0.1

1

100.0

35,928

0.6

1

100.0

35,928

0.6

1

100.0

15,351

0.3

1

100.0

2,622

0.0

1

100.0

53,303

0.9

1

100.0

14,346

0.3

1

100.0

31,787

0.5

1

100.0

31,787

0.6

D32
D33
D34
D35
D36

Flexstay Inn KawasakiKaizuka
Comfort Hotel Toyama
Flexstay Inn KawasakiOgawacho
Flexstay Inn Ekoda
Super Hotel Tokyo-JR
Tachikawa Kitaguchi- 49 -Name of property

D37

Super Hotel JR Uenoiriyaguchi

34th fiscal period

35th fiscal period(January 1, 2020 to June 30, 2020)
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)

(July 1, 2020 to December 31, 2020)
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)

1

100.0

27,275

0.5

1

100.0

27,2750.5

D38

Hotel MyStays Shinsaibashi

1

100.0

13,813

0.2

1

100.0

0

0.0

D39

Comfort Hotel Kurosaki

1

100.0

37,894

0.6

1

100.0

37,894

0.7

D40

Comfort Hotel Maebashi

2

100.0

43,811

0.8

2

100.0

43,811

0.8

2

100.0

34,949

0.6

2

100.0

34,949

0.6

1

100.0

30,300

0.5

1

100.0

30,300

0.5

1

100.0

147,572

2.5

1

100.0

54,711

1.0

1

100.0

112,358

1.9

1

100.0

851,447

14.8

1

100.0

29,041

0.5

1

100.0

8,050

0.1

1

100.0

27,694

0.5

1

100.0

2,259

0.0

1

100.0

83,373

1.4

1

100.0

147,658

2.6

3

100.0

100,066

1.7

2

95.8

94,804

1.7

1

100.0

74,193

1.3

1

100.0

17,545

0.3

1

100.0

59,208

1.0

1

100.0

17,293

0.3

1

100.0

51,334

0.9

1

100.0

30,000

0.5

1

100.0

95,994

1.6

1

100.0

124,660

2.2

1

100.0

57,028

1.0

1

100.0

8,436

0.1

1

100.0

37,508

0.6

1

100.0

36,557

0.6

D41
D42
D43
D44
D45
D46
D47
D48
D49
D50
D51
D52
D53
D54

Comfort Hotel TsubameSanjo
Comfort Hotel Kitami
Hotel MyStays Gotanda
StationHotel Epinard Nasu
Hotel MyStays Fukuoka
TenjinHotel MyStays
Hamamatsucho
Hotel MyStays PremierKanazawa
Takamatsu Tokyu REI Hotel
Hotel MyStays Premier
Hamamatsucho
Hotel MyStays Shin Osaka
Conference Center
Hotel MyStays Premier
Omori
Beppu Kamenoi Hotel
Hotel MyStays Sapporo
StationHotel MyStays Yokohama
Kannai

D55

Art Hotel Joetsu

1

100.0

3,164

0.1

1

100.0

46,021

0.8

D56

Art Hotel Hirosaki City

1

100.0

2,997

0.1

1

100.0

34,9280.6

D57

Hotel MyStays Oita

1

100.0

14,079

0.2

1

100.0

18,6670.3

D58

Hotel MyStays Gotanda

1

100.0

25,281

0.4

1

100.0

5,621

0.1

D59

Hotel MyStays Tachikawa

1

100.0

39,951

0.7

1

100.0

31,656

0.6

1

100.0

103,236

1.8

1

100.0

11,363

0.2

1

100.0

75,356

1.3

1

100.0

26,762

0.5

D60
D61

Hotel MyStays Premier
Akasaka
Hotel MyStays Premier
Sapporo Park

- 50 -Name of property

D62
D63

D64

Hotel MyStays Ueno East
Hotel MyStays Midosuji
HonmachiHotel MyStays Sapporo
Aspen

34th fiscal period

35th fiscal period(January 1, 2020 to June 30, 2020)
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)

(July 1, 2020 to December 31, 2020)
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)

1

100.0

25,172

0.4

1

100.0

3,020

0.1

1

100.0

20,609

0.4

1

100.0

0

0.0

1

100.0

101,004

1.7

1

100.0

10,0120.2

D65

Art Hotel Ishigakijima

1

100.0

34,431

0.6

1

100.0

67,294

1.2

D66

Hotel MyStays Fuji Onsen
Resort1

100.0

43,344

0.7

1

100.0

98,948

1.7

D67

Hotel Sonia Otaru

1

100.0

30,074

0.5

1

100.0

62,1901.1

D68

Hotel MyStays Kanazawa
Castle1

100.0

22,119

0.4

1

100.0

33,7790.6

D69

Art Hotel Niigata Station

1

100.0

37,492

0.6

1

100.0

75,623

1.3

D70

Hotel MyStays Nagoya
Nishiki1

100.0

27,008

0.5

1

100.0

1,949

0.0

D71

Hotel Nord Otaru

1

100.0

27,027

0.5

1

100.0

33,8130.6

D72

Hotel MyStays Kagoshima
Tenmonkan

2

100.0

26,723

0.5

2

100.0

15,9450.3

D73

Art Hotel Asahikawa

1

100.0

15,000

0.3

1

100.0

33,6290.6

D74

Hotel MyStays Matsuyama

1

100.0

23,856

0.4

1

100.0

18,200

0.3

1

100.0

15,812

0.3

1

100.0

1,609

0.0

1

100.0

11,253

0.2

1

100.0

0

0.0

1

100.0

6,478

0.1

1

100.0

0

0.0

1

100.0

18,281

0.3

1

100.0

12,477

0.2

1

100.0

3,376

0.1

1

100.0

0

0.0

1

100.0

11,112

0.2

1

100.0

3,088

0.1

D75
D76
D77
D78
D79
D80

Hotel MyStays Sapporo
Susukino
Hotel MyStays Sapporo
Nakajima Park
Hotel MyStays Sapporo
Nakajima Park Annex
Flexstay Inn Sakuragicho
MyCUBE by MYSTAYS
Asakusa Kuramae
Hotel MyStays Kagoshima
Tenmonkan Annex

D81

Hotel MyStays Nayoro

1

100.0

16,191

0.3

1

100.0

29,0390.5

D82

Hotel MyStays Premier
Narita1

100.0

233,209

4.0

1

100.0

214,718

3.7

D83

Art Hotel Morioka

1

100.0

91,727

1.6

1

100.0

77,635

1.4

Subtotal

88

100.0

3,326,057

57.0

87

99.9

3,307,707

57.6

Total

150

99.2

5,838,836

100.0

143

99.0

5,738,249

100.0(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.
(Note 3) “Occupancy rate” and “Ratio of rental revenue” are rounded to one decimal place.
(Note 4) The trust beneficiary interests of Nisshin Palacestage Higashi-Nagasaki, Nishiwaseda Cresent Mansion, Neo
Prominence, City Court Kitaichijo, Lexington Square Akebonobashi, and Lexington Square Daitabashi were sold on
December 18, 2020.

- 51 -

(Note 5) The trust beneficiary interest of City House Tokyo Shinbashi was sold on January 15, 2020.

34th fiscal period

35th fiscal period(January 1, 2020 to June 30, 2020)

Name of property

D200
D201

Westin Grand Cayman Seven

Number oftenants(at end of
period)(unit)(July 1, 2020 to December 31, 2020)
Management
Management
Occupancy
Occupancy
contract
contract
Ratio ofRatio ofrate
Number ofrate
revenuerevenue management
management(at end oftenants(at end of(during(during
contract
contract
period)(at end of
period)period)period)revenuerevenue(%)
period)
(%)
(JPY
(JPY
(%)
(%)
(Note 1)
(unit)(Note 1)
thousand)thousand)(Note 3)(Note 3)(Note 3)(Note 3)(Note 2)
(Note 2)
(Note 4)

1

100.0

769,453

86.4

1

100.0

-

-

Sunshine Suites Resort

1

100.0

120,989

13.6

1

100.0

-

-

Total

2

100.0

890,442

100.0

2

100.0

-

-

Mile Beach Resort & Spa(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.
(Note 4) Since hotel operating expenses exceeded hotel operating revenues, management contract revenue was JPY 0.
excess amount is recorded as management contract losses.

- 52 -

The

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
Total

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-(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.

- 53 -

7

Status of Contract Amount and Fair Value of Specified Transaction
As of December 31, 2020, 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
69,383,000
65,133,000(165,929)
Receive floating rate/pay fixed rate
Currency option transaction, short
952,820
596,860
USD/CallNon-market(Option fees)(23,788)(14,921)(4,323)transaction
Currency option transaction, long
952,820
596,860
USD/Put(Option fees)
39,40725,71966,180(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 the Reporting Period, there are no investments in specified assets that are significant investment targets
for INV outside of 3 and 6 above.

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 the end of
the Reporting Period (JPY million) (Note 2)
Percentage of
total assets (%)

No. ofproperties(properties)Japan

448,273510,007

92.9

140

The Cayman Islands

35,136

38,698

7.1

2

Total

483,409548,706

100.0

142

(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, 2020.
“Appraisal value as of the end of the Reporting Period” indicates the real estate appraisal value as of December
31, 2020, or the research value stated in the real estate research report and the appraisal value of investment
securities. “Appraisal value as of the end of the Reporting Period” for preferred equity securities which INV
holds in Japan indicates acquisition cost since their fair value is deemed extremely difficult to value. “Appraisal
value as of the end of the Reporting Period” for assets which INV holds in the Cayman Islands indicates theamount converted to JPY using the exchange rate of USD 1 = JPY 103.50, which is the exchange rate on theclosing date of the fiscal period (December 31, 2020).

- 54 -

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

Westin Grand
D200 Cayman Seven Mile
Beach Resort & SPA

2

LocationGrand
Cayman,CaymanIslands

Scheduled time of
implementation

Total

Payment for
Advancethe Reporting
payments
PeriodReplacement of guest From January 2021
room key
To June 2021

30,025--

PurposeD51

Hotel MyStays
Premier Omori

Fire protection
Shinagawa-ku,
From January 2021
equipment renovationTokyo
To June 2021
work

30,000--D17

Hotel MyStays
OtemaeOsaka-shi,
Osaka

Guest room
renovation work

From January 2021
To June 2021

21,000--

D06

Hotel MyStays
Premier Dojima

Osaka-shi,
Osaka

Tenant spacerenovation work

From January 2021
To June 2021

20,000--

D56

Art Hotel Hirosaki
City

Hirosaki-shi,
Aomori

Tenant spacerenovation work

From January 2021
To June 2021

20,000--Capital Expenditures for the Fiscal Period Ended December 31, 2020
The principal construction work constituting capital expenditures for the real estate assets for the fiscal period ended
December 31, 2020 is as follows. Capital expenditures for the fiscal period totaled JPY 574,116 thousand, and together
with JPY 18,207 thousand in repair costs included in this fiscal period’s expenses, construction work totaling JPY 592,323
thousand was implemented.
Name of property

Location

PurposeTime of implementation

Payment(JPY thousand)Nasu-gun,Tochigi

Employee dormitory
construction work

From July 2020
To December 2020

168,699

Minato-ku,
TokyoFire protection equipment
renovation work

From July 2020
To December 2020

31,916Grand Cayman,
Restaurants and kitchens
Caymanrenovation work
Islands

From July 2020
To December 2020

29,129A47 Growth Maison Kaijin

Funabashi-shi, Automatic parking lot
Chiba
renovation work

From July 2020
To December 2020

24,200D52 Beppu Kamenoi Hotel

Beppu-shi, Oita Elevators renovation work

From July 2020
To December 2020

18,100

D44 Hotel Epinard Nasu
Hotel MyStays
D49 Premier
Hamamatsucho
Westin Grand Cayman
D200 Seven Mile Beach
Resort & SPA

302,071

Other construction

574,116

Total- 55 -

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)
31st
32nd
33rd
34th
35th
fiscal period
fiscal period
fiscal period
fiscal period
fiscal period
From July 1, 2018 From January 1, From July 1, 2019 From January 1, From July 1, 2020
to December 31, 2019 to June 30, to December 31, 2020 to June 30, to December 31,
2018
2019
2019
2020
2020
1,611,828

1,814,515

2,039,622

2,543,226

5,485,363

618,404

1,215,476

1,621,422

3,908,773

565,299415,718

990,368

1,117,818

966,6363,439,991

1,814,515

2,039,622

2,543,226

5,485,363

2,610,671(Note) The amount reserved for the relevant fiscal period includes the reserves for acquired properties, and the amountreversed includes the reserves for sold properties.

- 56 -

Overview of Expenses and Liabilities
1

Statement of Operating Expenses
34th fiscal period
January 1, 2020 to June 30, 2020
300,000
26,23147,2594,800
198,092
576,383

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

2(JPY thousand)35th fiscal period
July 1, 2020 to December 31, 2020
300,000
25,68467,7494,800
223,692
621,927

Borrowing Conditions

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

LenderSumitomo Mitsui Trust
Bank, Limited

Balance atBalance at
Borrowing beginning of end of Reportingdate
Reporting Period
Period(JPY thousand) (JPY thousand)Jan. 6,2020

880,000-

Mizuho Bank, Ltd.

-5,992,000

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

6,660,000-

5,992,000-

2,670,000-

3,000,000

Jul. 16,
2020

Sumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.
Citibank, N.A., Tokyo
BranchShinsei Bank, Limited
Resona Bank, Limited.
The Nomura Trust andBanking Co., Limited
Sumitomo Mitsui Trust
Bank, Limited
Subtotal

MUFG Bank, Ltd.

0.288

Jan. 6,2021

Unsecured(Note 4) (Note 2) / with noguarantee

0.338

Jul. 16,
2021

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

3,330,000
1,335,000

Jul. 20,2020-

1,000,000

0.338

Jul. 20,
2021

Sep. 14,2020-

3,000,000

0.338

Sep. 14,2021

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

328,500-

355,000-

355,000-

334,000

0.338

Oct. 13,2021

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

167,000-

328,500

880,000

34,847,000

0.590

Jul. 16,
2020

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

Oct. 13,2020

Mizuho Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Long-term Shinsei Bank, Limited
loans
Citibank, N.A., Tokyo（Note 5） Branch
Sumitomo Mitsui Trust
Bank, Limited
Resona Bank, Limited

Notes

-

Resona Bank, Limited.

Short-term
Development Bank ofloansJapan, Inc.

Averageinterest
Repayment Repayment
rate
Purposedate
method(%)(Note 1)

Jul. 16,
2015

5,992,000-

5,992,000-

5,992,000-

3,330,000-

3,000,000-

2,670,000-

1,335,000-

668,000-- 57 -

Type

LenderSumitomo Mitsui Trust
Bank, Limited
MUFG Bank, Ltd.

Balance atBalance at
Borrowing beginning of end of Reportingdate
Reporting Period
Period(JPY thousand) (JPY thousand)Jan. 22,2016

3,400,000

3,400,000

850,000

850,000

Mizuho Bank, Ltd.

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
MUFG Bank, Ltd.

Mar. 31,2016

The Bank of Fukuoka, Ltd.

570,000

570,000

650,000

650,000

1,333,000

1,333,000

The Shizuoka Bank, Ltd.

270,000

270,000

The Kagawa Bank, Ltd.

500,000

500,000

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

1,000,000

1,000,000

270,000

270,000

Averageinterest
Repayment Repayment
rate
Purposedate
method(%)(Note 1)

Notes

0.600

Jan. 22,2021

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

0.688

Mar. 30,
2021

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

0.688

Jun. 15,2021

AEON Bank, Ltd.

Jun. 30,2016

3,000,000

3,000,000

0.688

Jun. 30,2021

600,000

0.561

Jul. 20,
2020

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

0.688

Jul. 20,
2021

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

0.588

Mar. 14,2021

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

0.688

Mar. 14,2022

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

0.500

Sep. 14,2020

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

0.638

Nov. 29,
2021

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

Tokyo Star Bank, Limited
The Towa Bank, Ltd.
Long-term Tokyo Star Bank, Limited
loans（Note 5）
Mizuho Bank, Ltd.

Jul. 20,
2016
Jul. 20,
2016

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

Mar. 14,2017

The Shizuoka Bank, Ltd.
The Gunma Bank, Ltd.
Mizuho Bank, Ltd.

1,000,000-

1,700,000

1,700,000

1,633,000

1,633,000

333,000

333,000

333,000

333,000

333,000

333,000

253,000

253,000

200,000

200,000

165,000

165,000

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

Mar. 14,2017

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-

4,321,000

4,321,000

3,000,000

3,000,000

Sumitomo Mitsui Banking
Corporation

Mar. 14,2017

Mizuho Bank, Ltd.
The Daiichi Life InsuranceCo., Ltd.

May 29,2017- 58 -

Type

LenderBalance atBalance at
Borrowing beginning of end of Reportingdate
Reporting Period
Period(JPY thousand) (JPY thousand)Shinsei Bank, Limited
Citibank, N.A., Tokyo
BranchResona Bank, Limited

355,000-

355,000-

334,000-

300,000-

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

190,000-

167,000-

167,000-

Shinsei Bank, Limited
Citibank, N.A., Tokyo
BranchResona Bank, Limited

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

The Bank of Fukuoka, Ltd.

The Bank of Fukuoka, Ltd.

Longterm
loans（Note 5

AEON Bank, Ltd.
The Nomura Trust andBanking Co., Limited
The Hiroshima Bank, Ltd.
The Daiichi Life InsuranceCo., Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Sumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Sumitomo Mitsui Banking
Corporation
Shinsei Bank, Limited
MUFG Bank, Ltd.

Oct. 13,2017

Oct. 13,2017

Oct. 13,2017

Oct. 13,2017

Oct. 13,2017

Jun. 27,2018

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

1,250,000

1,250,000

1,065,000

1,065,000

1,250,000

1,250,000

1,250,000

1,250,000

1,060,000

1,060,000

1,250,000

1,250,000

1,000,000

1,000,000

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

2,220,000

2,220,000

1,998,000

1,998,000

1,110,000

1,110,000

1,000,000

1,000,000

890,000

890,000

Jul. 17,2018- 59 -

Averageinterest
Repayment Repayment
rate
Purposedate
method(%)(Note 1)

Notes

0.380

Oct. 13,2020

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

0.488

Oct. 13,2021

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

0.688

Oct. 13,2022

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

0.788

Oct. 13,2023

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

0.888

Oct. 11,2024

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

0.750

Jun. 27,
2023

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

0.388

Jul. 17,
2021

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

Type

LenderAverage
Balance atBalance at
Borrowing beginning of end of Reporting interest
Repayment Repayment
rate
PurposeReporting Period
Perioddate
date
method(%)(JPY thousand) (JPY thousand) (Note1)

Mizuho Bank, Ltd.

2,443,000

2,443,000

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

1,997,000

1,997,000

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
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.
Long-term
Mizuho Bank, Ltd.
loans
（Note 5 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 Branch
Development Bank ofJapan, Inc.
Resona Bank, Limited
The Nomura Trust andBanking Co., Limited
AEON Bank, Ltd.

Jul. 17,
2018

Jul. 17,
2018

Aug. 2,
2018

Sep. 26,
2018

Sep. 26,2018

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

3,287,000

3,287,000

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- 60 -

Notes

0.488

Jul. 17,2022

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

0.588

Jul. 14,2023

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

0.388

Aug. 2,2021

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

0.388

Sep. 26,
2021

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

0.488

Sep. 26,
2022(Note 3) (Note 2)

Unsecured/ with no
guarantee

Type

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

Balance atBalance at
AverageBorrowing beginning of end of Reporting interest Repayment Repayment
Purposerate
Reporting
PeriodPerioddate
date
method(JPY thousand) (JPY thousand) (%)(Note 1)
3,287,500
3,287,500

Sep. 26,
2018

Jan. 22,2019

MUFG Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Shinsei Bank, Limited
Resona Bank, Limited
Development Bank ofJapan, Inc.
The Bank of Fukuoka, Ltd.

Mar. 29,2019

The Shizuoka Bank, Ltd.
The Nomura Trust andBanking Co., Limited
Long-term
The
Senshu Ikeda Bank, Ltd.
loans
（Note 5） Aozora Bank, Ltd
The Nishi-Nippon City
Bank, Ltd.
The Tochigi Bank, Ltd.
Kiraboshi Bank, Ltd.
Citibank, N.A., Tokyo Branch
Development Bank ofJapan, Inc.

Mar. 29,2019
Mar. 29,2019
Jun. 17,2019
Jun. 28,
2019

Mizuho Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust
Bank, Limited
Citibank, N.A., Tokyo BranchJul. 16,2019

Shinsei Bank, Limited

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

Jan. 22,2022

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

0.361

Mar. 29,
2022

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

0.594

Mar. 29,2024

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

Mar. 29,2029
Jun. 17,2022
Jun. 17,2022

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

0.400Jan. 16,
2023

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

0.499

Jan. 16,
2024

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

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

500,000

500,000

1,000,000

1,000,000

0.888

1,000,000

1,000,000

0.340

1,000,000

1,000,000

0.334

571,400
1,464,800

1,331,200

1,331,200

628,600

628,600

1,000,000

1,000,000

200,000

200,000

600,000

600,000

571,400

571,400

1,464,800

1,464,800

1,331,200

1,331,200

628,600

628,600

1,000,000

1,000,000

200,000

200,000

600,000

600,000

Resona Bank, Limited

0.373

386,000

Mizuho Bank, Ltd.

Jul. 16,2019(Note 3) (Note 2)

1,275,000

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

Sep. 26,2023

386,000

571,400- 61 -

Unsecured/ with no
guarantee

0.588

1,275,000

1,464,800

Notes

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)
1,171,400
1,171,400

Jul. 16,2019

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

Jul. 16,2019

1,464,800

1,464,800

1,331,200

1,331,200

628,600

628,600

1,000,000

1,000,000

200,000

200,000

2,171,400

2,171,400

1,464,800

1,464,800

1,331,200

1,331,200

628,600

628,600

200,000

200,000

Mizuho Bank, Ltd.

2,170,400

2,170,400

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

1,464,800

1,464,800

1,331,200

1,331,200

628,600

628,600

Jul. 16,2019

Mizuho Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust
Bank, Limited
Citibank, N.A., Tokyo
Long-term Branch
loans
Development Bank of(Note 5) Japan, Inc.
AEON Bank, Ltd.
The Nomura Trust andBanking Co., Limited
Mizuho 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.

Jul. 19,2019

Jul. 19,2019

200,000

200,000

1,085,000

1,085,000

987,000

987,000

987,000

987,000

684,000

684,000

500,000

500,000

300,000

300,000

300,000

300,000

100,000

100,000

712,000

712,000

986,000

986,000

986,000

986,000

684,000

684,000

500,000

500,000

300,000

300,000

300,000

300,000

100,000

100,000

375,000

375,000

Mizuho Bank, Ltd.

712,000

712,000

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., LimitedAozora Bank, Ltd..,

986,000

986,000

986,000

986,000

684,000

684,000

500,000

500,000

Jul. 19,2019

300,000

300,000

300,000

300,000

100,000

100,000

375,000

375,000- 62 -

Notes

0.563

Jul. 16,
2024

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

0.638

Jan. 16,
2025

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

0.788

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

0.580Jul. 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
Development 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
Repayment Repayment Purpose
rate
date
Reporting Period
Perioddatemethod(%)(JPY thousand) (JPY thousand) (Note 1)
1,212,000
1,212,000

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 andBanking Co., LimitedAozora Bank, Ltd.

Jul. 19,2019

986,000

986,000

986,000

986,000

684,000

684,000

300,000

300,000

300,000

300,000

100,000

100,000

375,000

375,000

1,211,000

1,211,000

986,000

986,000

986,000

986,000

684,000

684,000

Notes

0.638

Jan. 16,
2025

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

0.788

Jul. 16,
2025

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

0.788

Jul. 16,
2025

0.462

Jan. 16,2024

300,000

300,000

300,000

300,000

100,000

100,000

375,000

375,000

Jul. 22,2019

700,000

700,000

Mizuho Bank, Ltd.
Long-term The Daisan Bank, Ltd.
loans
(Note 5)
The Daisan Bank, Ltd.

Aug. 28,
2019

2,882,000

2,882,000

800,000

800,000

Oct. 15,2019

1,700,000

1,700,000

0.486

Apr. 15,2024

The Daisan Bank, Ltd.

Oct. 15,2019

1,000,000

1,000,000

0.638

Apr. 15,2025

The Nishi-Nippon City
Bank, Ltd.

Oct. 15,2019

1,000,000

1,000,000

0.788

Oct. 15,2025

Sumitomo Mitsui Trust
Bank, Limited
Sumitomo Mitsui Trust
Bank, Limited
Momiji Bank,Ltd.

Jan. 6,2020

1,550,000

1,550,000

0.417

Jan. 6,2023

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

3,050,000

3,050,000

1,000,000

1,000,000

0.643

Jan. 6,2025

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

0.487

Mar. 16,
2025

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

0.388

Mar. 16,
2023

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

Tokyo Star Bank, Limited

Jan. 16,
2020

The Kiyo Bank

500,000

500,000

Mizuho Bank, Ltd.

634,000

634,000

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

Mar. 16,
2020

The Yamaguchi Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
The Bank of Fukuoka, Ltd.

Mar. 30,2020

300,000

300,000

1,000,000

1,000,000

333,000

333,000

333,000

333,000

200,000

200,000

450,000

450,000

850,000

850,000

1,090,000

1,090,000

333,000

333,000- 63 -

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) (Note 1)
582,000
582,000

MUFG Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Shinsei Bank, Limited
Resona Bank, Limited
The Nomura Trust andBanking Co., Limited
Long-term Aozora Bank, Ltd.
loans
(Note 5) The Shizuoka Bank, Ltd.

Mar. 30,
2020(Note 2)
(Note 3)(Note 4)(Note 5)

628,000
1,090,000

570,000

570,000

500,000

500,000

270,000

270,000

1,000,000

1,000,000

270,000

270,000

The Kagawa Bank, Ltd.

500,000

500,000

The Yamaguchi Bank, Ltd.

550,000

550,000

The Chukyo Bank, Ltd.

(Note 1)

628,000
1,090,000

0.588

Mar. 16,
2025

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

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

1,000,000

1,000,000

Citibank, N.A., Tokyo
BranchJun. 15,2020

1,000,000

1,000,000

0.338

Jun. 17,2022

Tokyo Star Bank, Limited

Jul. 20,2020-

600,000

0.338

Jul. 20,2022

Subtotal

254,388,000

219,541,000

Total

255,268,000

254,388,000

Notes

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 foreach loan agreement as of the repayment date rounded to three decimal places is shown.
The funds raised through borrowings are mainly used to acquire trust beneficiary interests in real estate and to repay the borrowings.
The balance at the end of the period will be repaid in full on the repayment date.
INV implemented the prepayment of its short-term consumption tax loan on October 30, 2020.
Long-term loans includes current portion of long-term loans payable.

- 64 -

3

Investment Corporation Bonds
Status of investment corporation bonds as of the end of the Reporting Period is as follows.
Bond SeriesFirst Series
Unsecured Investment
Corporation Bonds(Note 1)
Second Series
Unsecured Investment
Corporation Bonds(Note 1)
Third Series
Unsecured Investment
Corporation Bonds(Note 1)Forth Series
Unsecured Investment
Corporation Bonds(Note 1)Fifth Series
Unsecured Investment
Corporation Bonds(Note 1)
Sixth Series
Unsecured Investment
Corporation Bonds(Note 1)

Issue Date

Balance at theBalance at the Interest Rate
beginning of the
Redemption Use of
end of the period
Redemption Date(%)
periodmethodfunds(JPY thousand)(JPY thousand)May 25, 2018

1,000,000

1,000,000

0.400

May 25, 2023

(Note 2)

(Note 3)

May 25, 2018

1,000,000

1,000,000

0.800

May 25, 2028

(Note 2)

(Note 3)October 12, 2018

2,000,000

2,000,000

0.550 October 12, 2023

(Note 2)

(Note 4)

Security/
Guaranty

Unsecured /Unguaranteed
October 28, 2019

1,000,000

1,000,000

0.480 October 28, 2024

(Note 2)

(Note 5)October 28, 2019

2,000,000

2,000,000

0.900 October 26, 2029

(Note 2)

(Note 5)

March 13, 2020

1,200,000

1,200,000

0.850 March 13, 2030

(Note 2)

(Note 4)

Total
8,200,000
8,200,000－－－－－(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 5) The funds will be used in strategic capital expenditure.

4

Short-Term Investment Corporation Bonds

Not applicable
5

Investment Unit Options

Not applicable- 65 -

Acquisitions and Sales for the Fiscal Period Ended December 31, 2020

1

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

Type of asset

Name of property

Trust
Nisshin Palacestage
beneficiary A27
Higashi-Nagasaki
interest
Trust
Nishiwaseda Cresent
beneficiary A53
Mansioninterest
Trust
beneficiary A76 Neo Prominence
interest
Trust
beneficiary A100 City Court Kitaichijointerest
Trust
Lexington Square
beneficiary A54
Akebonobashi
interest
Trust
Lexington Square
beneficiary A71
Daitabashi
interest

Sale

Acquisition
price
(JPY
million)

Sales date−−

December18, 2020−−

December18, 2020

Acquisition
date

−

−

December18, 2020−−

December18, 2020−−

December18, 2020

−

Total

−

December18, 2020−−

Gain/loss on
Sales priceBook value
sales(JPY million)(JPY million) (JPY million)(Note 1)
(Note 3)(Note 1)
(Note 2)
(Note 4)
1,036
1,882
7,869

1,509
1,585
1,678
1,280

3,270

1,092
820

11,139

8,284

2,602

(Note 1) The sale is a transaction under two purchase and sale agreements with different transferees, in which the six properties of the sold assets are
divided into groups of four properties (A27, A53, A76 and A100) and two properties (A54 and A71). The sale price and gain on sale show
the total amount of each of the abovementioned four properties and two properties. The sale prices of individual properties are notdisclosed as the transferees’ consent has not been obtained for disclosure. Accordingly, the gain on sales of individual properties are notdisclosed, either. The same shall apply hereinafter.
(Note 2) Sale prices show the total sale prices set forth in the purchase and sale agreements for the trust beneficiary interests of each of the four
properties and two properties, and do not include adjustments for property taxes or city planning taxes, or national or local consumption
taxes. The same shall apply hereinafter.
(Note 3) As of December 18, 2020.
(Note 4) Gain on sale is calculated by deducting the book value and the transfer related cost for each of the four properties and two properties.
(Note 5) The trust beneficiary interest of Nisshin Palacestage Higashi-Nagasaki was integrated in a single account with other trust accounts when
INV procured funds through debt financing backed by trust assets in July 2011. Therefore, for the purpose of selling the trust beneficiaryinterests of the property by itself, INV has implemented the procedures for the trust split effective on November 17, 2020 and recorded
certain expenses. For details on the debt financing backed by trust assets and the integration of trust accounts, please refer to the press
release “Notice concerning Fund Procurement through Debt Financing Backed by Trust Assets and Repayment of Borrowings and Change
in Trustee of Trust Assets” dated July 15, 2011.
(Note 6) Amounts are rounded down to the nearest million yen.

2

Acquisitions and Sales of Other Assets

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

- 66 -

3

Transaction Price Verification of Specified Assets

Real Estate Transactions
Acquisitionor saleName of property

Category of Transaction
specified asset
date

Sales price(JPY
million)(Note 1)

Appraisal
value
(JPY
million)Appraiser

Appraisal
dateReal estate
Assets Research
DecemberNovember 1,
Trust
1,360 and Development
beneficiary18, 2020
2020
Inc.
interest
Real estate
JLL Morii
Nishiwaseda Cresent
DecemberNovember 1,
Trust
Sale
A53
2,810
Valuation &beneficiary
18,
2020
2020
MansionAdvisory
K.K.
interest
7,869
Real estate
DecemberJapan Real Estate November 1,
Trust
Sale
A76 Neo Prominence
2,270
beneficiary18, 2020
Institute
2020
interest
Real estate
DecemberJapan Real Estate November 1,
Trust
Sale
A100 City Court Kitaichijo
2,160
beneficiary18, 2020
Institute
2020
interest
Real estate
Lexington Square
DecemberTanizawa Sogo
November 1,
Trust
Sale
A54
1,990
beneficiary18, 2020
Appraisal Co., Ltd.
2020
Akebonobashi
interest
3,270
Real estate
Lexington Square
DecemberTanizawa Sogo
November 1,
Trust
Sale
A71
1,260
beneficiary18, 2020
Appraisal Co., Ltd.
2020
Daitabashi
interest(Note 1) Acquisition price or sales price do not include various costs (brokerage commissions, taxes and other public dues) required for acquisitionof the property and is the purchase price indicated in the trust beneficiary interest purchase agreement.
(Note 2) The real estate appraisal described above is conducted by applying “Section 3: appraisals concerning prices of real estate subject tosecuritization” of “Real Estate Appraisal Standard.”
Sale

4

A27

Nisshin Palacestage
Higashi-Nagasaki

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.

- 67 -

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- 68 -

Other1
Notice(1) General Meeting of Unitholders
INV’s General Meeting of Unitholders was held on December 22, 2020.
The summary of the matters approved at the General Meeting of Unitholders are as follows.
AgendaPartial Amendment to
Articles ofIncorporation

Summary
With the consent of the asset management company, the asset management fees for the period
from January 2013 to December 2020 had been reduced. INV has further obtained theconsent of the Asset Management Company to reduce the amount of asset management fees
for the period from January 2021 to December 2021 to an amount which is lower than theamount that would be applicable if such reduction were not made, and which is at the samelevel as the amount applied for the period from January 2020 to December 2020.
Accordingly, the Investment Corporation will amend the standards concerning the amount andpayment of the asset management fees for the period from January 2021 to December 2021.,
effective January 1, 2021.

(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

2

Item

Summary

September 10,
2020

Conclusion of MOU toamend the MLPM
Agreements with Major
Tenant, MHM GroupOn September 10, 2020, INV entered into a MOU to amend respective
MLPM Agreements for domestic hotels owned by INV and operated by
INV's main tenant, MHM Group. Pursuant to the MOU, we havepartially changed the rent payment conditions and changed the fixed
rent payment amount, the variable rent calculation method, rent
payment method and payment date.

December 11,
2020

Conclusion of MOU toamend the MLPM
Agreements with Major
Tenant, MHM GroupOn December 11, 2020, INV entered into a MOU to amend respective
MLPM Agreements for domestic hotels owned by INV and operated by
INV's main tenant, MHM Group. Pursuant to the MOU, we havepartially changed the rent payment conditions and changed the fixed
rent payment amount, the variable rent calculation method, rent
payment method and payment date.

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 unit
and percentages are rounded off for unspecified values.
- 69 -

II.

Balance Sheet(Unit: JPY thousand)(Reference)
Fiscal period ended
June 30, 2020(as of June 30, 2020)

AssetsCurrent assets:
Cash and bank deposits
Cash and bank deposits in trust
Rental receivables
Deposits paid
Prepaid expenses
Income taxes receivable
Consumption taxes receivable
Other
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
Structures, at cost
Accumulated depreciation
Structures, 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*3- 70 -

Fiscal period ended
December 31, 2020(as of December 31, 2020)

10,190,672
6,127,902
304,863262,507582,415
129,613
831,675
18,429,649

21,210,252
6,295,192
1,717,908
356,534
708,338
16
6,536
30,294,779

19,392,579(494,780)
18,897,798
5,292,840(342,143)
4,950,697
1,458
(19)
1,439
1,160,530(117,632)
1,042,897
486,479
167,743,709(17,281,345)
150,462,363
33,693,125(9,275,639)
24,417,485
250,163(102,281)
147,8822,766,458(954,147)
1,812,311
250,271,308
129,129452,619,792

19, 406,379(713,241)
18,693,138
5,293,194(494,825)
4,798,368
1,458
(52)
1,406
1,183,738(175,331)
1,008,406
588,930
164,029,805(18,754,443)
145,275,361
33,102,139(9,866,713)
23,235,425
233,505(98,339)
135,165
2,727,329(1,094,873)
1,632,456
245,560,970
440,929,629

10,637,811
14,614,328
25,252,140

10,637,811
14,575,091
25,212,903

17,856,387
1,362,721
898,626
152,275
22,667
20,292,677
498,164,611

17,856,387
1,362,721
681,990
66,417
22,667
19,990,184
486,132,717

69,157
69,157
516,663,418

62,85362,853
516,490,350

(Unit: JPY thousand)(Reference)
Fiscal period ended
June 30, 2020(as of June 30, 2020)

Fiscal period ended
December 31, 2020(as of December 31, 2020)

Liabilities
Current liabilities:
Accounts payable

142,330

Short-term loans payable
Current portion of long-term loans payable

846,058

880,000

34,847,000

57,380,000

55,601,000

Accounts payable-other

301,280

24,701

Accrued expenses

269,814344,243

605

605

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

578,858

1,000,217

580,016

31,889

11,14360,006,137

92,833,627

Non-current liabilities:
Investment corporation bonds
Long-term loans payable
Tenant leasehold and security deposits in trust
Derivatives liabilities

8,200,000

8,200,000

197,008,000

163,940,000

1,749,862

1,672,037

128,466

170,488

Asset retirement obligations

32,75632,977

Total non-current liabilities

207,119,086

174,015,504

267,125,223

266,849,131

235,701,512

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(6,130)(6,130)

Other deduction of capital surplus*2(5,524,006)(5,524,006)

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

734,294734,294

Retained earnings

13,168,294

13,371,340

Total surplus

13,902,588

14,105,635

249,604,100

249,807,147

Deferred gains or losses on hedges(65,906)(165,929)

Total valuation and translation adjustments(65,906)(165,929)

249,538,194

249,641,218

516,663,418

516,490,350

Capital surplus, net

Total unitholders’ equity
Valuation and translation adjustments:

Total net assets*1

Total liabilities and net assets- 71 -

III.

Statement of Income and Retained Earnings(Unit: JPY thousand)(Reference)
Fiscal period ended
June 30, 2020
(from January 1, 2020 toJune 30, 2020)

Operating revenue
Rental revenue – real estateManagement contract revenue
Gain on sales of properties
Dividend income
Total operating revenue
Operating expenses
Property-related expenses
Management contract expenses
Asset management fees
Directors’ compensation
Asset custody fees
Administrative service fees
Other
Total operating expenses
Operating income
Non-operating income
Interest income
Foreign exchange gains
Interest on tax refund
Gain of derivatives
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Interest expenses on investment corporation bonds
Amortization of investment corporation bond issuance costs
Loan-related 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

Fiscal period ended
December 31, 2020
(from July 1, 2020 to
December 31, 2020)

*1
*2
*3

5,838,836
890,4422,046,294
634,651
9,410,225

5,738,249
2,602,343
8,340,593*1*2

6,801,584
535,279
300,000
4,800
26,23147,259198,092
7,913,247
1,496,977

5,044,533
983,288
300,000
4,800
25,68467,749223,692
6,649,749
1,690,843

114
7,712
47,743
1,613
57,183

107
12,878
1,498
81,626
3,272
99,382702,917
31,67525,911
5,928
362,534670
1,129,639
424,522654,685
28,2306,303
472,665
4,007
1,165,892
624,333

73,11973,119-73,11973,119424,522605
605
423,917
12,744,377
13,168,294

624,333
605
605
623,728
12,747,612
13,371,340- 72 -

IV.

Statement of Changes in Net Assets(Reference) Fiscal period ended June 30, 2020 (from January 1, 2020 to June 30, 2020)(Unit: JPY thousand)Unitholders’ equity
SurplusCapital surplus
Deduction of capital surplus

Unitholders’capitalCapital surplus

Balance at the beginningof the period
Changes during theperiodDistributions fromsurplus

Allowance fortemporarydifferences
adjustment

Other
deduction ofcapital surplus

Total
deduction ofcapital surplus

Capital surplus(net)

235,701,512

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

734,294

－

－

－

－

－

－

235,701,512

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

734,294

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

Balance at the beginningof the period
Changes during theperiodDistributions fromsurplus
Net income
Changes other thanunitholders’ equity(net)
Total changes during theperiodBalance at the end of theperiodValuation and translation adjustments
Totalunitholders’equityDeferred
gains or losses
on hedges

Totalvaluation andtranslation
adjustments

33,52533,525Total
net assets

Retainedearnings

Total
surplus23,261,426

23,995,720

259,697,232(10,517,049)(10,517,049)(10,517,049)(10,517,049)

423,917423,917423,917423,917259,730,758(99,432)(99,432)(99,432)(10,093,131)(10,093,131)(10,093,131)(99,432)(99,432)(10,192,564)

13,168,294

13,902,588

249,604,100(65,906)(65,906)

249,538,194- 73 -

Fiscal period ended December 31, 2020 (from July 1, 2020 to December 31, 2020)(Unit: JPY thousand)Unitholders’ equity
SurplusCapital surplus
Unitholders’capitalDeduction of capital surplus
Capital surplus

Balance at the beginningof the period
Changes during theperiodDistributions fromsurplus
Net income
Changes other thanunitholders’ equity(net)
Total changes during theperiodBalance at the end of theperiodAllowance fortemporarydifferences
adjustment

Other
deduction ofcapital surplus

Total
deduction ofcapital surplus

Capital surplus(net)

235,701,512

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

734,294

－

－

－

－

－

－

235,701,512

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

734,294

Unitholders’ equity
SurplusRetained earnings
Balance at the beginningof the period
Changes during theperiodDistributions fromsurplus
Net income
Changes other thanunitholders’ equity(net)
Total changes during theperiodBalance at the end of theperiodTotal surplus

Valuation and translation adjustments
Totalunitholders’equityDeferred
gains or losses
on hedges

Totalvaluation andtranslation
adjustments(65,906)(65,906)

Total
net assets

13,168,294

13,902,588

249,604,100

249,538,194(420,681)(420,681)(420,681)(420,681)

623,728

623,728

623,728

623,728(100,022)(100,022)(100,022)

203,046

203,046

203,046(100,022)(100,022)

103,024

13,371,340

14,105,635

249,807,147(165,929)(165,929)

249,641,218- 74 -

V.

Notes to Financial Statements[Notes Concerning Significant Accounting Policies]
By Period(Reference) Fiscal period ended June 30, 2020
(from January 1, 2020 to June 30, 2020)

Item
1. Evaluation standards and (a) Other securities
evaluation method ofThose with no fair value
assetsCost method through moving-average method
is used.
(b) Claims generated and debt incurred throughderivative transactions
Market value method is used.
2. Method of depreciationof non-current assets

Fiscal period ended December 31, 2020
(from July 1, 2020 to December 31, 2020)(a) Other securitiesThose with no fair value
Cost method through moving-average method
is used.
(b) Claims generated and debt incurred throughderivative transactions
Market value 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
Structures
20 years
Structures
20 years
Tools, furniture and fixtures
3-18 years
Tools, furniture and fixtures
3-18 years
Buildings in trust
7-67 years
Buildings in trust
7-67 years
Buildings and accompanying facilities in
Buildings and accompanying facilities intrust
2-33 years
trust
2-33 years
Structures in trust
10-55 years
Structures in trust
10-55 years
Tools, furniture and fixtures in trust
Tools, furniture and fixtures in trust
2-20 years
2-20 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 Investment corporation bond issuance costs
Investment corporation bond issuance costs
Investment corporation bond issuance costs
deferred assets
Investment corporation bond issuance costs
are amortized using the straight-line method
are amortized using the straight-line method
over a period up to redemption of theover a period up to redemption of theinvestment corporation bonds.
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 andother taxes
recognition
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
amount assessed and determined, the amount amount assessed and determined, the amount- 75 -

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, 2020
(from January 1, 2020 to June 30, 2020)

Fiscal period ended December 31, 2020
(from July 1, 2020 to December 31, 2020)

corresponding to the relevant fiscal period is corresponding to the relevant fiscal period is
accounted for as property related expenses.
accounted for as property related expenses.
Of the amounts paid to the seller for Of the amounts paid to the seller for
acquisitions of real estate, the amount acquisitions of real estate, the amountequivalent to property taxes is capitalized as equivalent to property taxes is capitalized aspart of the acquisition cost of the real estate part of the acquisition cost of the real estate
instead of being charged as expense. The instead of being charged as expense. The
amount equivalent to property taxes that was amount equivalent to property taxes that was
included as part of the acquisition cost of real included as part of the acquisition cost of realestate during the fiscal period ended June 30, estate during the fiscal period ended December
31, 2020 is zero.
2020 is JPY 41,528 thousand.
(a) Method of hedge accounting(a) Method of hedge accounting
Deferred hedge accounting is used.
Deferred hedge accounting is used.
(b) Hedging instrument and hedged item
Hedging instrument: interest rate swap
Hedged item: interest on borrowings(b) Hedging instrument and hedged item
Hedging instrument: interest rate swap
Hedged item: interest on borrowings(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
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(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
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- 76 -

By Period
Item(Reference) Fiscal period ended June 30, 2020
(from January 1, 2020 to June 30, 2020)

Fiscal period ended December 31, 2020
(from July 1, 2020 to December 31, 2020)are recorded at amounts exclusive ofconsumption taxes.

are recorded at amounts exclusive ofconsumption taxes.

[Notes to the Balance Sheet](Reference) Fiscal period ended June 30, 2020
Fiscal period ended December 31, 2020(as of June 30, 2020)(as of December 31, 2020)*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, 2020 (from January 1, 2020 to June 30, 2020)
1. Reasons, related assets and amounts(Unit: JPY thousand)Relatedassets, etc.

ReasonLeaseholdrights intrust

Amortization ofleasehold rights

Total

Initial amount

Balance at the
beginning of
periodAllowance
set aside
duringperiodReversalduringperiodBalance at theend of period(131,332)(6,130)--

ሺ6,130)(131,332)(6,130)--

ሺ6,130)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, 2020 (from July 1, 2020 to December 31, 2020)
1. Reasons, related assets and amounts(Unit: JPY thousand)Relatedassets, etc.

ReasonLeaseholdrights intrust

Amortization ofleasehold rights

Total

Initial amount

Balance at the
beginning of
periodAllowance
set aside
duringperiodReversalduringperiodBalance at theend of period(131,332)(6,130)--(6,130)(131,332)(6,130)--(6,130)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 applicableacquired with governmental subsidies, etc.
Building and accompanying facilities in trust
JPY 73,119 thousand- 77 -

[Notes to Statement of Income and Retained Earnings](Reference) Fiscal period ended June 30, 2020
(from January 1, 2020 to June 30, 2020)

Fiscal period ended December 31, 2020
(from July 1, 2020 to December 31, 2020)*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(Rent/common area charges) (Note)(Other revenues)
Total

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

5,604,840(Other revenues)

233,996

Total

5,838,836

B. Real estate rental expenses

B. Real estate rental expenses

Property-related expenses

Property-related expenses(Maintenance costs)

2,452,700

208,047
5,738,249(Maintenance costs)

548,085(Taxes and public dues)

598,839(Taxes and public dues)

779,062(Insurance expenses)

19,721(Insurance expenses)

19,719(Depreciation expenses)

3,578,589(Depreciation expenses)

3,564,224(Other expenses)
Total

(A-B)
(Note) Of which, revenue from variable
hotel rents

6,801,584

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)

Total

133,441
5,044,533

C. Real estate rental income(A-B)(962,747)
1,246,746*2. Management contract revenue and expenses(Unit: JPY thousand)
A.
B.
C.
D.

(Other expenses)

151,732

C. Real estate rental incomeE.

5,530,201

2,912,073
2,021,630
890,442
4,096
109,853
420,999329
535,279
355,162- 78 -(Note) Of which, revenue from variable
hotel rents

693,715
1,105,021*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 contract losses (A-B)(Note)
Non-life insurance expenses
Depreciation expenses
Other expenses
Total
E.

323,764
774,406
450,641
101,221428,5632,862
983,288

Management contract revenue and(983,288)
expenses (C-D)(Note) If management contract expenses exceed
management contract revenues, the excess amountis recorded as management contract losses.

*3. Gain on sales of properties*3. Gain on sales of properties(Unit: JPY thousand)(Unit: JPY thousand)Nisshin Palacestage Higashi-Nagasaki, Nishiwaseda Cresent
Mansion, Neo Prominence and City Court Kitaichijo

City House Tokyo Shinbashi
Proceeds from sales of properties

4,474,757

Cost of sales of properties

2,269,720

Other expenses on sales of properties
Gain on sales of properties

158,741

Proceeds from sales of properties

7,870,163

Cost of sales of properties

6,183,306

Other expenses on sales of properties

2,046,294

Gain on sales of properties

176,967
1,509,889

Lexington Square Akebonobashi and Lexington Square
Daitabashi
Proceeds from sales of properties

3,270,294

Cost of sales of properties

2,100,964

Other expenses on sales of properties
Gain on sales of properties

76,876
1,092,453(Note) The sale prices of individual properties are not disclosed
as the transferees’ consent has not been obtained fordisclosure.

[Notes to Statement of Changes in Net Assets](Reference) Fiscal period ended June 30, 2020
(from January 1, 2020 to June 30, 2020)

Fiscal period ended December 31, 2020
(from July 1, 2020 to December 31, 2020)

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 1 Total number of investment units authorized 10,000,000 units
Total number of investment units issued andoutstanding

6,096,840 units- 79 -

Total number of investment units issued andoutstanding

6,096,840 units

[Notes Related to Tax Accounting](Reference) Fiscal period ended June 30, 2020(as of June 30, 2020)

Fiscal period ended December 31, 2020(as of December 31, 2020)

1. Significant components of deferred tax assets and liabilities 1. Significant components of deferred tax assets and liabilities(Unit: JPY thousand)(Unit: JPY thousand)(Deferred tax assets)(Deferred tax assets)
Enterprise tax payable
731 Enterprise tax payable
731
Buildings and other (merger)

301,485

Buildings and other (merger)

312,445

Land (merger)

693,693

Land (merger)

472,381

Loss carried forward (Note 1)

522,444

Loss carried forward (Note 1)

532,677

Asset retirement obligations

10,305

Asset retirement obligations

10,374

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

100,736

113,080

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

2,103,480

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

469,321
4,762(522,444)(1,581,036)(2,103,480)

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

Due after
one to twoyears

Due after
two tothree years--

522,444---(522,444)

-

-

-

-

-

Tax loss carriedforward (a)Valuation
allowance
Deferred tax
assetsDue after
three tofour years

four to fiveyears
Tax loss carriedforward (a)Valuation
allowance
Deferred tax
assets--522,444--(522,444)---(1,374,387)(1,907,065)

Due after
one to twoyears

Due after
two tothree years-

201,976

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

-

-

-

-

-

Tax loss carriedforward (a)Valuation
allowance
Deferred tax
assets

years

Total

(532,677)

Due
withinone yearfour to fiveDue after
five years

1,907,065

Total(Note 1) The amounts of tax loss carried forward and thedeferred tax assets by carry-forward period are as
follows.
(Unit: JPY thousand)Due after
Due after

465,374

Tax loss carriedforward (a)Valuation
allowance
Deferred tax
assetsDue after
five years

Due after
three tofour years

Total

-

10,232532,677-(10,232)(532,677)---(a) Tax loss carried forward is multiplied by statutory tax rate.

(a) Tax loss carried forward is multiplied by statutory tax rate.
2. Significant difference between statutory tax rate and the
2. Significant difference between statutory tax rate and theeffective tax rate
effective tax rate
Statutory tax rate
31.46%
Statutory tax rate
31.46%
Deductible cash distributions(8.87)%

Changes in valuation allowance

Changes in valuation allowance(16.98)%Others0.10%

Untaxable dividend income(5.61)%

Effective tax rate

0.10%

Others0.15%

Effective tax rate

0.14%

- 80 -(31.46)%

[Notes Related to Financial Instruments](Reference) Fiscal period ended June 30, 2020
(from January 1, 2020 to June 30, 2020)

Fiscal period ended December 31, 2020
(from July 1, 2020 to December 31, 2020)

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.

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.

(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.

- 81 -

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.

2. Estimated fair value of financial instruments.
Book value, fair value and the difference between value asof June 30, 2020 are as follows.
(Unit: JPY thousand)Book Value(1) Cash and bankdeposits(2) Cash and bankdeposits in trust
Total assets

Fair Value

Difference

10,190,672

10,190,672-

6,127,902

6,127,902-

16,318,574

16,318,574-(880,000)(880,000)-(57,380,000)(57,380,000)

848,260(3) Short-term loans(4) Current portion of
long-term loans
payable(5) Investment
corporation bonds(6) Long-term loans(8,200,000)(7,351,740)(197,008,000)(197,008,000)-

Total liabilities(263,468,000)(262,619,740)

848,260

23,80823,808-(7) Derivatives

2. Estimated fair value of financial instruments.
Book value, fair value and the difference between value asof December 31, 2020 are as follows.
(Unit: JPY thousand)Book Value(1) Cash and bankdeposits(2) Cash and bankdeposits in trust
Total assets(3) Short-term loans(4) Current portion of
long-term loans
payable(5) Investment
corporation bonds(6) Long-term loans
Total liabilities(7) Derivatives

Fair Value

Difference

21,210,252

21,210,252-

6,295,192

6,295,192-

27,505,445

27,505,445-(34,847,000)(34,847,000)-(55,601,000)(55,601,000)-(8,200,000)(7,467,240)

732,760(163,940,000)(163,940,000)-(262,588,000)(261,855,240)

732,760(104,071)(104,071)-(*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.

- 82 -

(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
As for derivative transactions for which hedge
accounting is not applied, the contract amount as of
the closing date and the amount equivalent to thenotional principal prescribed in the contract are as
follows.

(7) Derivatives(a) Derivatives transactions to which hedge accounting is
not applied
As for derivative transactions for which hedge
accounting is not applied, the contract amount as of
the closing date and the amount equivalent to thenotional principal prescribed in the contract are as
follows.

(Unit: JPY thousand)(Unit: JPY thousand)

Derivative

Contract amount, etc.
Amount due

Classification transaction

after

type, etc.

Fair value

Valuation(*1)

gains/losses

Derivative

Contract amount, etc.
Amount due

Classification transaction

after

type, etc.

one year
optiontransaction

transaction

fees)

transaction

Currency

3,271,290(- 79,014)

USD/Call

1,890,460(- 46,376) (- 48,852)(30,162)(OptionOTC

fees)transaction

Currency

optionoptiontransaction

transaction(Optionfees)

952,820

596,860(- 23,788)(- 14,921)(19,464)

952,820

596,860(39,407)(25,719)(66,180)(26,773)

long

long
USD/Put(- 4,323)

short

short

OTC

gains/losses

Currency

option(Option

Valuation(*1)

one year

Currency

USD/CallFair value

3,271,290(109,770)

USD/Put

1,890,460(70,605)(138,567)(28,797)(*1) Estimation method for fair value(Optionfees)(*1) Estimation method for fair value

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

- 83 -

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

(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.

(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.

(Unit: JPY thousand)(Unit: JPY thousand)Contract amount, etc.
Method of Derivativehedge

transaction

accounting

type, etc.

Primary
hedged item

Contract amount, etc.

(*1)
Amount due
after

Fair value(*2)

Method of Derivativehedge

transaction

accounting

type, etc.

Primary
hedged item

one yearaccounting
methodfloating

after

Fair value(*2)

one yearswap
ReceiveAmount due

Interest rate

Interest rate
Principle(*1)

Principle
Borrowings

98,362,000 65,133,000(65,906)

accounting
methodrate/pay
fixed rate

swap
Receivefloating

Borrowings

69,383000 65,133,000(165,929)

rate/pay
fixed rate(*1) The contract amount, etc. for interest rate swap are (*1) The contract amount, etc. for interest rate swap arestated based on a notional principal.
stated based on a notional principal.
(*2) Estimation method for fair value(*2) Estimation method for fair value
Interest rate swap:
Interest rate swap:
Estimated based on the price, etc. presented by the
Estimated based on the price, etc. presented by thecorrespondent financial institutions.
correspondent financial institutions.
(Note 2) Financial instruments for which fair value is(Note 2) Financial instruments for which fair value isextremely difficult to value.
extremely difficult to value.
Category
Tenant leasehold andsecurity deposits in trust
Investment securities(Unit: JPY thousand)Book value
1,749,862
17,856,387

Category
Tenant leasehold andsecurity deposits in trust
Investment securities(Unit: JPY thousand)Book value
1,672,037
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.

- 84 -

(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, 2020

As of December 31, 2020
(Unit: JPY thousand)(Unit: JPY thousand)Due within
one year

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

Due within
one year

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

Cash and bank deposits

10,190,672--

Cash and bank deposits

21,210,252--

Cash and bank deposits intrust

6,127,902--

Cash and bank deposits intrust

6,295,192

-

-

Total

16,318,574

-

-

Total

27,505,445--

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

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

Cash and bank deposits

-

-

-

Cash and bank deposits

-

-

-

Cash and bank deposits in
trust

-

-

-

Cash and bank deposits in
trust

-

-

-

Total

-

-

-

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, 2020

As of December 31, 2020
(Unit: JPY thousand)Due within Due after one to Due after two
one year
two years
to three years
880,000--

57,380,000

-

-

-

-

1,000,000

Long-term loans-

53,602,000

44,207,000

Total

58,260,000

53,602,000

45,207,000

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

Due within
one year
34,847,000--

55,601,000

-

-

-

-

3,000,000

Long-term loans-

48,679,000

42,405,000

Total

90,448,000

48,679,000

45,405,000

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
Short-term loans
Current portion of longterm loans payable
Investment corporation
bonds

-

-

-

(Unit: JPY thousand)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
Short-term loans
Current portion of longterm loans payable
Investment corporation
bonds

-

-

-

-

-

-

1,000,000-

4,200,000---

2,000,000

1,000,000

4,200,000

Long-term loans

44,964,000

40,798,000

13,437,000

Long-term loans

32,920,000

38,936,000

1,000,000

Total

46,964,000

41,798,000

17,637,000

Total

33,920,000

38,936,000

5,200,000- 85 -

[Notes Related to Asset Retirement Obligations](Reference) Fiscal period ended June 30, 2020
(from January 1, 2020 to June 30, 2020)

Fiscal period ended December 31, 2020
(from July 1, 2020 to December 31, 2020)

1. Summary of the asset retirement obligations for the period
1. Summary of the asset retirement obligations for the period
INV has recorded asset retirement obligations in regard to
INV has recorded asset retirement obligations in regard to
its obligation to restore the land to its original condition
its obligation to restore the land to its original condition
related to the fixed-term land lease agreement of Comfort
related to the fixed-term land lease agreement of Comfort
Hotel Maebashi held by INV.
Hotel Maebashi held by INV.
2. Calculation method for asset retirement obligations for the
2. Calculation method for asset retirement obligations for theperiodperiodThe amount of the asset retirement obligations has been
The amount of the asset retirement obligations has been
calculated by fixing the estimated period of use at 43 years,
calculated by fixing the estimated period of use at 43 years,
based on the period until the expiration of the fixed-termbased on the period until the expiration of the fixed-term
land lease agreement, and by using a discount rate ofland lease agreement, and by using a discount rate of
1.342%.
1.342%.
3. Increase/decrease in the total amount of asset retirement
3. Increase/decrease in the total amount of asset retirement
obligations for the period
obligations for the period(Unit: JPY thousand)(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

32,539217
32,756- 86 -

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

32,756
221
32,977

[Notes Related to Rental Properties](Reference) Fiscal period ended June 30, 2020
(from January 1, 2020 to June 30, 2020)

Fiscal period ended December 31, 2020
(from July 1, 2020 to December 31, 2020)

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 the fair value 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 the fair value 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

53,552,976

Book value
Fair value atBalance at theBalance at the the end of the
Change during
periodbeginning of
end of thethe period
the period
periodUse

65,438,000

Residences

50,904,075(8,610,346)

42,293,729

54,237,000

4,738,684

6,120,000

Commercial
facilities

4,738,684(49,457)

4,689,226

6,040,000

14,373,376

421,613,565

470,778,826

Hotels421,613,565(3,042,918) 418,570,646

470,583,650

11,673,203

477,256,324

542,336,826

Total

477,256,324(11,702,721) 465,553,602

530,860,650(2,648,900)

Commercial
facilities

4,789,956(51,271)

Hotels407,240,188

Total

465,583,121

50,904,075(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, 2020 were acquisition of
hotels and construction work related to capital
expenditures.
(Note 3) The major factors of the decrease were sale ofresidential properties and recording of depreciation.
(Note 4) The fair value as of June 30, 2020 is based on theappraisal 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.

(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, 2020 were construction
work related to capital expenditures.
(Note 3) The major factors of the decrease were sale ofresidential properties and depreciation.
(Note 4) The fair value as of the end of the Reporting Period
is determined 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.

For information related to profits and losses from rental
properties in the fiscal period ended June 30, 2020, pleaserefer to “Notes to Statement of Income and Retained
Earnings.”

For information related to profits and losses from rental
properties in the fiscal period ended December 31, 2020,
please refer to “Notes to Statement of Income and Retained
Earnings.”[Notes Related to Restriction on Asset Management](Reference) Fiscal period ended June 30, 2020
(from January 1, 2020 to June 30, 2020)

Fiscal period ended December 31, 2020
(from July 1, 2020 to December 31, 2020)

Not applicable.

Not applicable.

- 87 -

[Notes Related to Transactions with Related Parties](Reference) Fiscal period ended June 30, 2020 (from January 1, 2020 to June 30, 2020)
1

Interested parties of the Asset Manager

Classification

Interested
party of the
Asset
Manager

NameBusiness or occupation

Percentage ofvoting rights
owned
(%)

Type of transaction

Transaction
amount(JPY thousand)(Note 1)

Account

Adria Tokutei
Mokuteki Kaisha(Note 3)

Investment
management business-

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

10,593,000--

Heijo Tokutei
Mokuteki Kaisha(Note 3)

Investment
management business-

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

5,643,000--

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

Rental revenues

112,358

Hotelbusiness

Rentalreceivables

Payment of property
management costs andmanagement fees (Note 2)

273,674-

Rental revenues

2,205,610

Rentalreceivables

93,116

Payment of property
management costs andmanagement fees (Note 2)

985,476

Accounts
payable-other

93,109MyStays HotelManagement
Co., Ltd.
(Note 3)(Note 1)
(Note 2)
(Note 3)(Note 4)

PropertyHotelbusiness--

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

40,124-

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.
Adria Tokutei Mokuteki Kaisha, Heijo Tokutei Mokuteki Kaisha, Naqua Hotel & Resorts Management Co., Ltd. and MyStays HotelManagement Co., Ltd. have no capital relationship to be disclosed with the Asset Manager. However, these Tokutei Mokuteki Kaishaor the tenants and operators have received an anonymous partnership investment or investment through funds that are managed byaffiliates 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 Adria Tokutei Mokuteki Kaisha, Heijo 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, in which other expenses for acquisition, property taxes, city planning taxes and consumption
taxes are not included.

Purchase Price

Name of Property

Counterparty

D82

Hotel MyStays Premier Narita

Adria Tokutei Mokuteki Kaisha

10,593,000

D83

Art Hotel Morioka

Heijo Tokutei Mokuteki Kaisha

5,643,000

Number

Total(JPY thousand)

16,236,000- 88 -

2

Asset Custody Company
Classification

Asset CustodyCompany

Business or
occupation

Name

Sumitomo Mitsui
Trust Bank,
Limited

Percentage ofinvestment
units owned(%)

Banking andtrust businessType of transaction
Borrowing of
short-term loan
Repayment ofshort-term loan
Borrowing of
long-term loan
Repayment oflong-term loan-

Transaction
amount(JPY thousand)(Note 1)880,000
672,000
8,280,000
3,680,000

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

Account

Short-termloans payable

880,000

Long-termloans payable

35,388,000

Prepaid expenses

73,764

Finance-related fees
(Note 2)

81,770Long-term
prepaid expenses

139,632

Interest expenses(Note 2)99,901 Accrued expenses

530(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.

Fiscal period ended December 31, 2020 (from July 1, 2020 to December 31, 2020)
1

Interested parties of the Asset Manager

Classification

Interested
party of theAsset Manager(Note 1)
(Note 2)NameBusiness or occupation

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

Rental revenues

851,447

Accounts
receivable

402,013

MyStays HotelManagement Co.,
Ltd.
(Note 2)Hotelbusiness-

Rental revenues

1,389,730

Accounts
receivable

966,790

Consumption taxes, etc., are not included in transaction amounts, but are included in the balance at the end of the period.
Naqua Hotel & Resorts Management Co., Ltd. and MyStays Hotel Management Co., Ltd. have no capital relationship to be disclosedwith the Asset Manager. However, these tenants and operators have received an anonymous partnership investment or investment
through funds that are managed by affiliates of FIG (a subsidiary of SoftBank Group Corp., which is a parent company of the AssetManager 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 to interested parties.

- 89 -

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

Transaction
amount(JPY thousand)(Note 1)
2,998,500
880,000
2,670,000

Account

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

Short-termloans payable

2,998,500

Long-termloans payable

32,718,000

Prepaid expenses

69,946

Finance-related fees
(Note 2)

8,995

Long-term
prepaid expenses

108,663Interest expenses(Note 2)

92,604 Accrued expenses

883(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.

- 90 -

[Notes Related to Per Unit Information](Reference) Fiscal period ended June 30, 2020
(from January 1, 2020 to June 30, 2020)

Fiscal period ended December 31, 2020
(from July 1, 2020 to December 31, 2020)

Net assets per unit

JPY 40,929

Net income per unit

JPY 70Net 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)Net assets
unit
JPYper41,125

JPY 39,063

JPY 40,946

Net incomeunit
JPY per
3,748

JPY 1,504

JPY 102

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.

The basis for calculating net income per unit is as follows.

(Reference) Fiscal period ended June 30, 2020
(from January 1, 2020 to June 30, 2020)

Fiscal period ended December 31, 2020
(from July 1, 2020 to December 31, 2020)

Net income for the period (JPY thousand)
423,917
Amounts not attributable to common unitholders(JPY thousand)Net income attributable to common units
423,917(JPY thousand)Average number of investment units during the
6,096,840
period (units)

4,363,420
Net income 2,952,688
for the period (JPY thousand)Amounts not attributable to common unitholders(JPY thousand)Net income attributable to common units
4,363,420 2,952,688(JPY thousand)Average number of investment units during the3,436,572 3,149,936
period (units)- 91 -

623,728
623,728
6,096,840

[Notes Related to Significant Subsequent Events](Reference) Fiscal period ended June 30, 2020
(from January 1, 2020 to June 30, 2020)

Fiscal period ended December 31, 2020
(from July 1, 2020 to December 31, 2020)
Not Applicable

Not Applicable[Notes Related to Provision and Reversal of Allowance for Temporary Differences Adjustment](Reference) Fiscal period ended June 30, 2020
(from January 1, 2020 to June 30, 2020)
Not Applicable

Fiscal period ended December 31, 2020
(from July 1, 2020 to December 31, 2020)
Not Applicable[Accounting Estimates Related to Impact of Spread of COVID-19](Reference) Fiscal period ended June 30, 2020
(from January 1, 2020 to June 30, 2020)
Under the assumption that the impact of spread of COVID-19
gradually subsides and the business environment recovers after
the next fiscal period, INV recorded accounting estimates
involving fixed asset impairment.

Fiscal period ended December 31, 2020
(from July 1, 2020 to December 31, 2020)
Under the assumption that the impact of spread of COVID-19
gradually subsides and the business environment recovers after
the next fiscal period, INV recorded accounting estimates
involving fixed asset impairment.

Since it is difficult to accurately predict when it will subside or
the extent of the impact regarding the spread of COVID-19, thefinancial condition and business performance of INV after the
next fiscal period may be affected in case there is a change inthe spread of infection.

Since it is difficult to accurately predict when it will subside or
the extent of the impact regarding the spread of COVID-19, thefinancial condition and business performance of INV after the
next fiscal period may be affected in case there is a change inthe spread of infection.

- 92 -

VI.

Statement of Cash Distribution(Reference) Fiscal period ended
June 30, 2020
(from January 1, 2020 toJune 30, 2020)
I.

Unappropriated retained
earnings
II . Distributions(Distribution per unit)
III. Retained earnings (losses)
carried forward
Calculation method of
distribution amountFiscal period ended
December 31, 2020
(from July 1, 2020 to
December 31, 2020)

JPY 13,168,294,104

JPY 13,371,340,907

JPY 420,681,960(JPY 69)

JPY 1,018,172,280(JPY 167)

JPY 12,747,612,144

JPY 12,353,168,627

In accordance with the distribution
policy set forth in Article 17,
Paragraph 1 of the Articles ofIncorporation
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 420,681,960 out of net
income of JPY 423,917,103.
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,
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 1,018,172,280, which isthe sum of net income of JPY
623,728,763 and a part of retained
earnings brought forward of JPY
394,443,517. Moreover, INV does
not make excess profit distribution
set forth in Article 17, Paragraph 4of the Articles of Incorporation.

- 93 -

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 December 31, 2020 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 theaccompanying English translation of Balance Sheet, Statement of Income and Retained Earnings, Statementsof 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- 94 -

VII. Statement of Cash Flows (Reference Information)

Fiscal period ended
June 30, 2020
(from January 1, 2020 toJune 30, 2020)
Cash flows from operating activities
Net income before taxes
Depreciation and amortization
Loss on reduction entry of non-current assets
Amortization of investment corporation bond issuance costs
Loan-related costs
Interest income
Interest expenses
Foreign exchange losses (gains)
Loss (gain) of derivatives
Decrease (increase) in rental receivables
Decrease (Increase) in deposits paid
Decrease (increase) in receivable 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 in property and equipment in trust due to sale
Others, net
SubtotalInterest income received
Interest expenses paid
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities
Payment into time deposits
Purchases of property and equipment
Purchases of property and equipment in trust
Purchases of leasehold rights in trust
Repayments of tenant leasehold and security deposits in trust
Proceeds from tenant leasehold and security deposits in trust
Payment 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
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period*1Cash and cash equivalents at end of period- 95 -(Unit: JPY thousand)Fiscal period ended
December 31, 2020
(from July 1, 2020 to
December 31, 2020)

424,522
3,999,589
73,1195,928
362,534(114)
728,828
9,864(47,743)2,798,340
219,998
7,942
1,594,835(13,390)(187,039)
163,143(1,411)
546,581(20,238)
2,269,720
726,442
13,661,453
114(729,698)(605)
12,931,264

624,333
3,992,787
6,303
472,665(107)
682,915(30)(81,626)(1,413,044)(94,026)
129,597
831,675
640,046
578,858(256,749)
68,632(420,200)(20,746)
8,284,271(104,384)
13,921,171
107(680,307)(605)
13,240,366(458,135)(16,523,212)(1,387,263)(56,966)
42,113(559,000)
43,852(18,898,611)(1,328,500)(139,812)(358,986)(99,182)
26,461
109,484(1,790,534)

880,000(2,686,000)
19,583,000(14,683,000)
1,184,469(265,553)(10,514,410)(6,501,494)
13(12,468,828)
28,787,403
16,318,574

34,847,000(880,000)
600,000(35,447,000)(287,367)(424,124)(1,591,491)
30
9,858,370
16,318,574
26,176,945

(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, 2020
(from January 1, 2020 toJune 30, 2020)
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, 2020
(from July 1, 2020 to
December 31, 2020)
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, 2020
(from January 1, 2020 toJune 30, 2020)(As of June 30, 2020)(Unit: JPY thousand)Cash and bank
10,190,672
deposits
Cash and bank
6,127,902
deposits in trust
Cash and cash
16,318,574
equivalents- 96 -

Fiscal period ended
December 31, 2020
(from July 1, 2020 to
December 31, 2020)(As of December 31, 2020)(Unit: JPY thousand)Cash and bank
21,210,252
deposits
Cash and bank6,295,192
deposits in trust
Time deposits withover three months(1,328,500)
deposit period
Cash and cash
26,176,945
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.
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- 97 -

It is necessaryDomestic Portfolio Map (As of December 31, 2020)

No. of Properties(Note 1)140

Others(Note 1)

No. ofResidential
Properties

84

54

2

No. ofHotels(Note 1) Including Sheraton Grande Tokyo Bay Hotel, underlying assets of TMK investment(Note 2) For properties corresponding to the number and their overview,please refer to pages [28-30] and pages [61-64].

- 98 -

- 99 -

Financial Conditions
As it is difficult to expect that the outbreak of COVID-19 will come to an end soon, in the short term INV
will implement initiatives that restrict an increase in interest payments on refinancing of existing borrowingsand ensure refinancing. Over the medium to long term, INV will implement financial strategies such as
reduction of borrowing costs, extension of average interest-bearing debt repayment period, diversification ofloan maturity dates and financing measures.

 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)

6th Series Investment
Corporation Bonds

Mar. 13, 2020

10.0

1,200

0.85%

A+ (JCR)

Total

8,200

 Lender Formation (as of February 28, 2021)- 100 -

 LTV (based on appraisal value)(Note 1) and Weighted Average Interest Rate(Note 2)

 DSCR(Note 3)

 Rating
Rating Agency

Rating Object

RatingOutlookJapan Credit Rating
Agency, Ltd.

Long-term
Issuer Rating

A+

Negative(Note 1)

(Note 2)
(Note 3)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,. Excluded the temporal increase of income due to the change ofinvestment structure regarding overseas assets for the calculation of June 2019 fiscal period.

- 101 -

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.

- 102 -

Annual Schedule- 103 -

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.

- 104 -

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 9:00-17:00- 105 -