Translation

This is an English language translation of the original Japanese announcement on our Website released on February 20, 2018.
However, no assurance or warranties are given with respect to the accuracy or completeness of this English language translation.
The Japanese original shall prevail in the case of any discrepancies between this translation and the Japanese original.

Summary of Financial Results (REIT)
for the Fiscal Period Ended December 31, 2017
February 20, 2018
Name of Issuer:

Invincible Investment Corporation

Stock Exchange Listing: Tokyo Stock Exchange

Securities Code:

8963

URL

Representative:
Name of Asset Manager:
Representative:
Contact:

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

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

TEL. +81-3-5411-2731

Scheduled Date of
Scheduled Date of Filing of
Securities Report:

Commencement for
March 26, 2018

Supplementary Materials for
Financial Results:

Yes

Presentation Meeting:Yes (for analysts and investors)

Distribution Payments:

March 27, 2018

1.

(values are rounded down to the nearest JPY million)
Financial Results for the Fiscal Period ended December 31, 2017 (from July 1, 2017 to December 31, 2017)(1)

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

Operating Income

Ordinary Income

JPY million%

Net Income

JPY million%

JPY million%

Fiscal period ended
December 31, 2017

12,647

36.6

8,223

53.9

7,303

55.3

7,303

55.3

Fiscal period ended
June 30, 2017

9,260

(2.6)

5,344

(9.9)

4,702

(13.4)

4,702(13.4)Net Income per Unit

Ordinary Income /Total Assets

Net Income /Unitholders’ Equity

Ordinary Income /Operating Revenues

JPY

%

%

%

Fiscal period ended
December 31, 2017

1,712

4.6

2.2

57.7

Fiscal period ended
June 30, 2017

1,241

3.5

1.6

50.8

(Note)(2)“Net Income per Unit” is calculated based on the average number of investment units during the period and is rounded to the nearest yen.
Net income per unit calculated based on the number of investment units issued and outstanding at the end of fiscal period ended December
31, 2017 (4,793,181 units) and rounded down to the nearest yen is JPY 1,523.

Distributions
Distribution(Excluding excess profit
distribution)

Per Unit

Total

Distribution

Excess Profit
Distribution
Per Unit(Including excess profit
distribution)

Total

Per Unit

Total

Dividend
PayoutRatio

Distribution/ Net
AssetsJPY

JPY million

JPY

JPY million

JPY

JPY million%%

Fiscal period ended
December 31, 2017

1,528

7,323

36

172

1,564

7,496

100.3

4.1

Fiscal period ended
June 30, 2017

1,243

4,799

21

81

1,264

4,880

102.1

3.5

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

(3)

Distribution (excluding excess profit) differs from net income for the fiscal period ended December 2017, since INV distributes almost
all of the profit as defined in Article 136, Paragraph 1 of the Investment Trust and Investment Corporation Act, which includes deferredgain on hedge of the interest rate swap.
The distribution in excess of profit for the fiscal period ended December 31, 2017 is JPY 172 million (JPY 36 per unit), all of which is
the refund of investment for the purpose of stabilizing distributions.
The “Dividend Payout Ratio” is calculated in accordance with the following formula:
Dividend Payout Ratio = Distribution Amount (Excluding excess profit distribution) ÷ Net Income × 100“Dividend Payout Ratio” is rounded to the nearest one decimal place.
“Distribution/ Net Assets” is calculated based on the figures excluding excess profit distribution.

Financial Position
Total Assets

Net Assets

Net Assets / Total Assets

Net Assets per Unit

JPY million

JPY million%

JPY

Fiscal period ended
December 31, 2017371,758

181,32048.8

37,829Fiscal period ended
June 30, 2017

306,421139,06245.4

36,019(Note)“Net Assets per Unit” is calculated based on the number of investment units issued and outstanding at the end of each period, and is rounded
to the nearest yen.

2

(4)

Cash Flows
Cash Flows fromOperating
Activities

Cash Flows from
Investment
Activities

Closing Balance ofCash and
Cash Equivalents

Cash Flows from
Financing
Activities

JPY million

JPY million

JPY million

JPY million

Fiscal period ended
December 31, 2017

13,676(60,034)

57,453

20,693Fiscal period ended
June 30, 2017

6,830

(35,704)

24,2579,598

2.

Forecasts for the Fiscal Periods ending June 30, 2018 (from January 1, 2018 to June 30, 2018) and December 31, 2018(from July 1, 2018 to December 31, 2018)

Operating
Revenues

Fiscal Period
ending June 30,
2018
Fiscal Period
endingDecember 31,
2018(Reference)

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

JPY
million%JPY
million%JPY
million%JPY
million

%

JPY

JPY

JPY

12,784

1.1

8,081

(1.7)

7,370

0.9

7,369

0.9

1,383

0

1,383

12,884

0.8

8,129

0.6

7,410

0.5

7,409

0.5

1,562

0

1,562

Estimated net income per unit for the fiscal periods ending June 30, 2018 and December 31, 2018 are JPY 1,537 and JPY 1,545
respectively.

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

None
None
None
None

(2) Number of Investment Units Issued and Outstanding(a) Number of Units Issued and Outstanding
December 31, 2017 4,793,181
as of the End of the Fiscal Period (Including Treasury Units)(b) Number of Treasury Units as of the End of the Fiscal Period December 31, 2017
(Note)0June 30, 2017

3,860,824

June 30, 2017

0

Please refer to “Notes Related to Per Unit Information” on page 52 regarding the number of investment units which is the basis for the
calculation of net income per unit.

3ͤThe Implementation Status of Statutory Audit
At the time of this financial report, the audit procedures for the financial statements pursuant to the Financial Instruments
and Exchange Act are yet to be completed.
ͤExplanation on the Appropriate Use of the Forecast of Results and Other Matters of Special Consideration(Explanation on the Appropriate Use of the Forecast of Results)
The forward-looking statements in this financial report are based on the information currently available to us and certain
assumptions which we believe are reasonable. Actual operating performance may differ significantly due to factors wecannot predict as of this date, including gains or losses from the disposition of properties, repayment of borrowings,
decreases in rents and changes in operating conditions. Further, there is no guarantee of the payment of the forecast
distribution amount.
Please refer to “Assumptions Underlying the Forecast of Financial Results and Distribution for the Fiscal Periods ending
June 2018 and December 2018” on page 22 for assumptions used in the forecasts and precautions regarding the use of suchforecasts.
Unless otherwise specified herein, amounts less than JPY 1 are rounded down, and ratios are rounded to the nearest one
decimal place.

41. Related Companies of the Investment Corporation
Disclosure is omitted because there have been no material changes in the “Structure of the Investment Corporation”
section of the latest securities report (filed on September 21, 2017 and the extraordinary report filed on January 5, 2018).

2. Management Policy and Operating Conditions(1) Management Policy
Disclosure o f “Investment Policies,” “Investment Targets,” “Distribution Policies” and the “Investment Restriction” isomitted because there have been no material changes from the relevant sections of the latest securities report (filed on
September 21, 2017)(2) Operating Conditionsa

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

INV was established in January 2002 in accordance with the Investment Trust and Investment Corporation Act (Act No.
198 of 1951, as amended; the “Investment Trust Act”). In May 2004, INV was listed on the Osaka Securities Exchange(application for delisting was made in August 2007), and in August 2006 was listed on the Real Estate Investment andTrust Securities Section of the Tokyo Stock Exchange (Ticker Code: 8963).
After the absorption-type merger with LCP Investment Corporation (“LCP”) was implemented on February 1, 2010, as
specified in Article 147 of the Investment Trust Act, with LCP as the absorbed corporation, INV issued new investment
units through a third-party allotment on July 29, 2011 and refinanced its debt. Calliope Godo Kaisha (“Calliope”), an
affiliate of the Fortress Investment Group LLC (“FIG” and together with Calliope and other affiliates of FIG, collectively
the “Fortress Group”) was the main allottee, and the sponsor changed to the Fortress Group. FIG became a subsidiary ofSoftbank Group, effective December 27, 2017. SoftBank Group acquired FIG, helping to improve INV’s relationships
with Japanese banks and companies, and is working with MyStays Hotel Management Co., Ltd. (“MHM”) on several
technology, online, and distribution initiatives which MHM believes will provide benefits to the hotels.
Ever since the commencement of sponsorship from the Fortress Group, INV has been focusing its efforts on improving the
profitability of its portfolio and establishing a revenue base in order to secure stable distributions, and has strengthened thelender formation through new borrowings and the refinancing of existing bank borrowings, thereby creating a financial basefor external growth. With this platform as a base, in June 2014, Consonant Investment Management Co., Ltd., the asset
manager to which INV entrusts the management of its assets (the “Asset Manager”) revised the Investment Guidelines for
INV, and positioned hotels as a core asset class alongside residential properties with a view towards expanding investmentsin the hotel sector in which demand is forecasted to rise going forward. As a result of the external growth efforts andportfolio rebalance to be described below, INV's portfolio at the end of the previous period ended December 2017
comprised of 126 properties (54 hotels, 67 residential properties and five others) (Note 1)with a total acquisition price of
JPY 353,695 million. The acquisition price of the portfolio has increased a significant 4.5x, compared to May 22, 2014,
which is the date immediately prior to INV’s initial investment in hotels.
In the Reporting Period, INV conducted an issuance of new investment units (the “Public Offering”) and secondaryoffering on September 21, 2017 in order to acquire four hotels and a preferred equity interest in a special purpose
company (the “TMK”) on October 13, 2017 with funds raised through the Public Offering and new borrowings. The
TMK holds Sheraton Grande Tokyo Bay Hotel (the “Sheraton”), a full service hotel with 1,016 rooms, the highest
room count among the Disney hotels and the Tokyo Disney Resort official hotels (Note 2). By investing in a flagshiphotel such as the Sheraton via the preferred equity interest, INV aimed to improve the portfolio profitability throughthe high 8.8% simulated dividend yield (Note 3) and the stability through portfolio diversification. The acquisition of
the five hotels located both in the Tokyo metropolitan area and in regional areas well situated to capture the increase indemand from foreign visitors is expected to contribute to the growth, improvement in stability of income, and overall
quality of the portfolio.

5INV commenced an Asset Recycling Program in July 2017 to sell assets that INV believed generate low yield, and using
those proceeds in an accretive manner to acquire assets that INV believes generate higher yield, aiming to improve theoverall NOI yield of the portfolio. INV sold two non-core assets (an office building and a parking lot) on July 31, 2017, andannounced the sale of three office properties and six residential properties on December 21, 2017 and December 26,
2017 in order to further pursue the portfolio rebalance. Of the December dispositions, the sale of one office building
and three residential properties were closed by the end of the Reporting Period, and the remainder closed in January
2018. In the December 2017 period, INV sold six properties for JPY 5,772 million at an actual NOI cap rate (Note 4)of 3.6%. The sales price is JPY 1,378 million or 31.4% above book value (Note 5) and JPY 930 million or 19.2%
above appraisal value (Note 5). The proceeds of the sale were used to acquire four hotels for JPY 12,425 million at an
appraisal NOI cap rate (Note 7) of 6.2% in February 2018, which is detailed on page 11. As a result of the asset sales,
INV will retain earnings of JPY 740 million or JPY 154 per unit at the end of fiscal period June 2018. Japanese
REIT’s are required to pay out at least 90% of income to maintain tax deductibility status. The retained earnings willserve as a reserve that could be used as a cushion to help insure that projected DPU targets are met.
As a continued focus on proactive asset management, INV changed the master lessee (“ML”) and property manager(“PM”) for four residential properties to reduce property management fees, and improve the economics of two
properties by changing the lease agreement structure. In addition, INV changed the operator of one hotel property to
MHM in an aim to increase the hotels profitability, particularly by focusing on increasing the number of inboundtourists to the hotel.
INV has signed a Memorandum of Understanding (the “MOU") with affiliates of Fortress Group with respect topreferential negotiating rights regarding the acquisition of hotels and residential properties, which will continue to provide
INV with considerable opportunities for external growth. As of the date of this document, there are 17 hotels (3,995 rooms)
and nine residential properties (743 units) in the MOU.
(Note 1)

Portfolio includes the preferred equity interest in the special purpose company (the TMK); the preferred
equity interest is counted as a hotel property, based on the use of Sheraton Grande Tokyo Bay Hotel, theunderlying asset of the preferred equity interest. Moreover, INV’s investment amount to the preferred equity
interest is counted as the acquisition price of the preferred equity interest. Hereinafter the same, unlessotherwise noted.

(Note 2)The “Disney hotels” are hotels under direct management of Oriental Land Co., Ltd. operating TDR using theDisney brand (four hotels). The “Tokyo Disney Resort official hotels” consist of the designated hotels within
the Tokyo Disney Resort Area (six hotels). Such specified names are based on the TDR’s hotel allianceprogram. “Tokyo Disney Resort” means Tokyo Disneyland, Tokyo DisneySea and related facilities, while the“Tokyo Disney Resort Area” means the bayside area to the south of “Maihama Station” on JR Keiyo Line
where Tokyo Disneyland, Tokyo DisneySea and the related facilities are located.

(Note 3)The simulated dividend yield is calculated by dividing (A) the product of (a) the simulated dividend, which is
calculated by deducting (i) simulated expenses such as operating expense of the TMK and the interest of debt
from (ii) the NOI of the Sheraton Grande Tokyo Bay Hotel stated in the appraisal report of the Tanizawa Sōgō
Appraisal Co., Ltd. on the valuation date of July 1, 2017, and multiplied by (b) ownership ratio of thepreferred equity interest (49.0%), by (B) the acquisition price (INV’s investment amount to the preferred
equity interest). As the simulated dividend is the reference data calculated based on the appraisal NOI andsimulated expenses calculated by the Asset Manager, there are possibilities that the actual dividend yield is far
differed from such reference data or the dividend is not distributed at all.

(Note 4)

Calculated by dividing actual NOI for July1, 2016 – June 30, 2016 for the properties sold in July 2017 andJanuary 1, 2017 – December 31, 2017 for other properties by the sale price.

(Note 5)

Based on the book value as of the date of sale.

(Note 6)

Appraisal Value is based on appraisal value stated in the appraisal reports by Assets Research andDevelopment Inc. on the valuation date of June 30, 2017 or December 1, 2017, appraisal reports by Japan
Real Estate Institute on the valuation date of December 1, 2017 or December 31, 2017, appraisal reports by
Tanizawa Sōgō Appraisal Co., Ltd. on the valuation date of December 1, 2017 , or appraisal report by Morii
Appraisal & Investment Consulting, Inc. on the valuation date of December 1, 2017.

(Note 7)

Calculated by dividing the total NOI derived from the direct capitalization method stated in the appraisal
reports by The Tanizawa Sōgō Appraisal Co., Ltd. on the valuation date of January 1, 2018 by the total
6acquisition price, and rounded to one decimal place.
(b)

Operational Environment and Performance

For the December 2017 period, the portfolio NOI increased by 18.9% or JPY 1,593 million to JPY 10,008 million
compared to the same period in the previous year (the December 2016 period), with an 11.2% increase from the hotel
portfolio and a 7.8% increase from the residential portfolio.
In addition, the portfolio maintained a high average occupancy rate (Note 1) of 97.9%. Commentary on hotel andresidential performance in the first half of 2017 is described below.
The NOI at the 40 hotels owned by INV (Note 2) increased by 3.6% for the period compared to the same period in theprevious year. The 40 hotels recorded an occupancy rate (Note 3) of 90.6% (+0.1 points YoY), ADR (Note 4) of JPY
10,083 (+0.8% YoY), and RevPAR (Note 5) of JPY 9,131 (+0.9% YoY). Of the total hotel revenue from the 53 hotels
INV owns (Note 6), fixed rents accounted for 49.1% (JPY 3,623 million) and variable rents accounted for 50.8% (JPY
3,741 million) at the 53 hotels.
Inbound visitors reached a record high of 28.6 million (+19.3% YoY) in 2017 while government targets are 40 million
in 2020 and 60 million in 2030. Under such circumstances, MHM, a hotel operator in the sponsor group which operates
84 hotels nationwide, including 45 hotels in INV’s portfolio, is continually enhancing its operations and recently
launched its new website which has initially resulted in higher conversion rates. MHM is also in the process oflaunching a new online reservation system in order to increase direct bookings to save commissions and have more
direct customers. MHM has also recently launched a new revenue management system based on machine learning to
improve the overbooking algorithms to help offset cancelation and improve revenue at the hotels overall. MHM iscontinuing to court the increasing foreign tourism business which accounted for 42% (Note 7) of INV owned MyStays
Hotel (Note 8) revenue in 2017. In addition to having multi-lingual chat and staff, MHM has sought to increase its
Chinese guest count by being the first Japanese hotel company to list its rooms on Fliggy, Alibaba’s online marketplacein China selling hotels, tours and other travel-related services from online travel agencies and direct travel service
providers, commencing from September 2017. MHM was the top international chain by revenue on Fliggy and won anaward for Single’s Day in China.
The NOI (Note 9) of the 70 residential properties (Note 10) increased 0.9% compared to the same period in the previous
year, and the average occupancy rate achieved a stable 94.8%, a decrease of 0.5 points compared to the same period in
the previous year.
As a continued focus on proactive asset management INV changed ML/PM for four residential properties (Note 11)
including Royal Parks Tower Minami-Senju, a flagship residential asset aiming to increase NOI by JPY 39 million peryear on an estimated basis (Note 12).
Trends for rent at city-center residential properties with small-type rooms maintained a moderate increase. Under the
positive circumstances in the macro environment, INV continues to focus on its rent increase program for new leases
and renewals as well as initiatives to reduce residential leasing costs based on a market analysis of each unit andproperty. In the Reporting Period, INV realized a rent increase for 47.5% (based on the number of contracts) of the newresidential lease contracts for an average rent increase of 2.4% compared to the previous rent across all new leases (Note13). Specifically, at Royal Parks Tower Minami-Senju, the flagship residential property which was acquired during theprevious period, INV achieved strong results with a rent increase for 87.3% (based on the number of contracts) of the
new lease contracts with an average rent increase of 10.3% compared to the previous rent across all new leases (Note13). INV achieved a rent increase for 59.2% (based on the number of contracts) of contract renewals for an average rent
increase of 2.0% compared to the previous rent across all renewal leases (Note 14), while maintaining a high contract
renewal rate of 85.3% (Note 13). Combined, new leases and renewal leases were signed at 2.2% higher than theprevious leases.
The total appraisal value of 125 properties (Note 6) at the end of the Reporting Period was JPY 400,007 million. The
portfolio has an unrealized gain of JPY 72,297 million (Note 15) and an unrealized gain ratio of 22.1% (Note 15). The
total appraisal value of 121 properties which were owned throughout the Reporting Period (including an additional
portion of Hotel Mystays Gotanda Station), increased by 0.4% from JPY 358,719 million at the end of June 2017 period
to JPY 360,007 million at the end of the Reporting Period .

7

Key Performance Indicators of 40 Hotel Properties (Note 2)

Occupancy Rate (Note 3)
ADR (JPY) (Note 4)
RevPAR (JPY) (Note 5)
GOP (JPY million) (Note 16)

December 2017
fiscal period
90.6%
10,083
9,131
6,232

Year-on-year change+0.1pt
+0.8%
+0.9%
+3.3%

Key Performance Indicators of 70 Residential Properties (Note 11)

Occupancy Rate (Note 1)
Average Rent per Tsubo per Month(JPY) (Note 17)
NOI (JPY million) (Note 10)

December 2017
fiscal period
94.8%

Year-on-year change-0.5pt

9,709

+1.8%

2,574

+0.9%

(Note 1)

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

(Note 2)Of the 49 acquired hotels held as of the beginning of the December 2017 Fiscal Period, the following nine
hotels with fixed-rent lease agreements are excluded: Super Hotel Shinbashi/ Karasumoriguchi, Comfort
Hotel Toyama, Super Hotel Tokyo-JR Tachikawa Kitaguchi, Super Hotel JR Ueno-iriyaguchi, Comfort Hotel
Kurosaki, Comfort Hotel Maebashi, Comfort Hotel Tsubame-Sanjo, Comfort Hotel Kitami and Takamatsu
Tokyu REI Hotel. The figures assume that all properties acquired in and after July, 2016 by INV had been
owned since July 1, 2016. The actual results before acquisition by INV are based on the data provided by thesellers.

(Note 3) “Occupancy rate” for the hotel properties is calculated in accordance with the following formula:
Occupancy rate = total number of occupied rooms during a certain period ÷ total number of rooms available
during the same period (number of rooms x number of days)
Hereinafter the same shall apply.
(Note 4)“ADR” means average daily rate, and is calculated by dividing total room sales (excluding service fees) for acertain period by the total number of days per room for which each room was occupied during the same period.
Hereinafter the same shall apply.

(Note 5)

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

(Note 6)

Excluding Sheraton Grande Tokyo Bay Hotel (preferred equity interest) which does not have appraisal value.

(Note 7)

The ratio of sales amount through overseas web agents to revenues.

(Note 8)The ratio of the amount of revenues from bookings through the overseas travel agencies to total revenues for
29 hotels of the41 hotels in INV’s portfolio that MHM operates as of the date of this document, excluding thefollowing 12 hotels without comparable data against 2016 due to rebranding etc.; Hotel MyStays
Nagoya-Sakae, Hotel MyStays Haneda, Hotel MyStays Utsunomiya, Hotel MyStays Gotanda Station, Hotel
Epinard Nasu, Hotel MyStays Premier Kanazawa, Hotel MyStays Premier Hamamatsucho, Hotel MyStays
Dojima, Hotel MyStays Shin Osaka Conference Center, Hotel MyStays Premier Omori, Beppu Kamenoi
Hotel and Hotel MyStays Sapporo Station. The figures assume that all hotels acquired in and after July 2016
by INV had been owned since July 1, 2016. The actual results before acquisition by INV are based on the data
provided by the sellers.

(Note 9)For the comparison of NOI, insurance income and related repair expenses, which are temporary items, areexcluded.

8

(Note 10) Based on the 70 residential properties owned as of the beginning of December 2017 Fiscal Period.
Of the 70 properties, three properties (Casa Eremitaggio, Lexel Mansion Ueno-Matsugaya and Sun Terrace
Minami-Ikebukuro) were sold on December 28, 2017. Therefore, for the three properties, July 1, 2017 throughDecember 28, 2017, or the disposition date, is deemed the operating period for the fiscal period ended
December 2017, and the leased area and the leasable area as of December 28, 2017 is deemed as the leased
area and the leasable area for such properties as of the end of December 2017 to calculate each number.
Hereinafter the same shall apply. In addition, the figures for the properties acquired after July 2016 are
calculated on the assumption INV had acquired those properties on January 1, 2016, using the actual figures
provided by the sellers of such properties for the period before the acquisition, for the purpose of comparison
with previous year.
(Note 11) ML and PM for Royal Parks Shinden and Royal Parks Momozaka were changed on July 1, 2017 and August 1,
2017 respectively, and ML and PM for both Royal Parks Tower Minami-Senju and Royal Parks Seasir
Minami-Senju were changed on December 1, 2017.
(Note 12) This is a figure estimated by the Asset Manager as of the date of this document, and there is no guarantee that
INV can realize such increase in NOI.
(Note 13) 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 14) Renewal rate is calculated by the number of renewed contracts during the relevant period divided by the
number of contracts due up for renewal during the relevant period(Note 15) The unrealized gain is calculated using the following formula: the appraisal value as of the end of theReporting Period - book value as of the end of the Reporting Period.
The unrealized gain ratio is calculated using the following formula: the unrealized gain ÷ book value as of theend of the Reporting Period.
(Note 16) “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 to operators (if any) from the hotel’s revenues . Hereinafter the same shall apply.
(Note 17) “Average Rent per Tsubo per Month” is calculated by dividing the total rental revenue including common
area charges for each month by the sum of total leased area at the end of each month during the relevant
period.
(c)

Overview of Fund Raising
As a result of the measures described below, INV’s interest-bearing debt outstanding balance was JPY 186,983
million and the Interest-Bearing Debt ratio (Note 1) and LTV (Note 2) were 50.0% and 44.5% respectively, as ofthe end of the Reporting Period, with an average interest rate (Note 3) of 0.51%.

(i) Equity Finance
INV executed a global public offering (the “Public Offering”) which closed on October 12, 2017 (number of new
investment units issued: 887,959; total issue value: JPY 37,917 million) and a third party allotment which closed
on November 1, 2017 (number of new investment units issued: 44,398; total issue value: JPY 1,895 million) in
connection with the Public Offering in order to procure part of the funds for the acquisition of five hotels(including an additional portion of Hotel MyStays Gotanda Station, an existing hotel) and preferred equity interestin a special purpose company.
(ii) Debt FinanceIn tandem with the Public Offering as described in (i) above, INV borrowed a new loan, New Syndicate Loan (H)(amount borrowed: JPY 22,993 million; interest rate: variable interest rate of 1-month JPY TIBOR plus 0.8%,
0.7%, 0.6%, 0.4%, 0.3%, 0.25% and 0.2% for durations of seven, six, five, four, three, two and one years), which
was arranged by Mizuho Bank, Ltd. as arranger and Sumitomo Mitsui Banking Corporation as co-arranger inorder to pay a portion of the acquisition price and related expenses for the acquisition of the specified assets.
In the Reporting Period, INV also filed a shelf registration statement of investment corporation bonds to the Kanto
Local Finance Bureau (planned amount of issue: JPY 100 billion, planned issue period: from August 2, 2017 to9August 1, 2019) on July 25, 2017.

(Note 1) Interest-Bearing Debt ratio uses the calculation formula below:
Interest-Bearing Debt ratio = total outstanding interest-bearing debt (excluding consumption tax loanof JPY 1,068 million)/total assets x 100(Note 2) LTV uses the calculation formula below:
LTV = total outstanding interest-bearing debt/total appraisal value (*) x 100(*) Since appraisal value for Sheraton Grande Tokyo Bay Hotel (preferred equity interest) is notavailable, the acquisition price of the preferred equity interest (JPY 17,845 million) has been added
as appraisal value of Sheraton Grande Tokyo Bay Hotel (preferred equity interest).
(Note 3)(d)

The average interest rate (annual rate) is calculated by the weighted average based on the outstandingbalance of borrowings and rounded to two decimal places.

Overview of Acquisition of Assets(i) Acquisition of preferred equity interest
The overview of preferred equity interest in Kingdom special purpose company (the “Kingdom TMK”) acquired on
October 13, 2017 is as follows:(1) Asset acquired

Preferred equity interest (the “Preferred Equity Interest”) provided
in Article 2(9) of the Act on Securitization of Assets (Act No. 105
of 1998, as amended) (Note1)(2) Number of units of preferred equity interest
to be issued

Preferred Equity Interest: 364,200 units(3) Number of units of preferred equity interest
acquired (ratio of interest holding)Preferred Equity Interest: 178,458 units (49.0%)(4) Acquisition price

JPY 17,845 million for 49.0% of the Preferred Equity Interest (Note2)(5) Name of underlying asset

The Sheraton Grande Tokyo Bay Hotel (the “Underlying Asset”)(Note 1)Along with acquisition of the Preferred Equity Interest, INV have acquired a 24.0% stake in the specified equity interests in
the TMK, as well as 49.0% of equity interest in a limited liability company (LLC), a holding company, (the “Holding
Company”) that owns 100% of equity interest in Keiyo Resort Development, G.K., a master lease company of theUnderlying Asset (the “ML”).

(Note 2)

The acquisition price is the investment amount. The amount does not include any taxation including consumption tax and isrounded down to the nearest million yen. In addition, the acquisition price of the specified equity interest and the equity
interest in the Holding Company described in (Note 1) is JPY 24,000 and JPY 9.8 million, respectively. Since theseamounts are very small, they are not included in the acquisition price.

10

(ii) Acquisition of four hotels
The overview of four hotels acquired on October 13, 2017 is as follows:
Property
number

Use

D50
Hotel

D51
D52

Hotel

D53

Property nameLocation

Acquisition
price(JPY million)(Note 1)

Appraisal value(JPY million)(Note 2)

13,068

13,200Hotel MyStays
Shin Osaka
Osaka, Osaka
Conference Center
Hotel MyStays
Shinagawa-ku,
Premier Omori
Tokyo
Beppu Kamenoi
Beppu, Oita
Hotel
Hotel MyStays
Sapporo Station

Sapporo,Hokkaido

Total

9,781

9,880

8,870

8,960

7,880

7,960

39,59940,000

SellerCategoryof specified
asset

HL Investments
Tokutei Mokuteki
KaishaSeptentrio3 Tokutei
Mokuteki Kaisha
Monza Tokutei
Mokuteki Kaisha

Trust
Beneficial
Interest

Suisei Tokutei
Mokuteki Kaisha

Trust
Beneficial
Interest(Note 1)

Acquisition Prices show purchase prices set forth in the purchase and sale agreements for the trust
beneficiary interests and do not include adjustments for property taxes, city planning taxes, or national or
local consumption taxes.

(Note 2)

Appraisal Value is based on appraisal value stated in the appraisal report by the Tanizawa Sōgō Appraisal
Co., Ltd. on the valuation date of July 1, 2017.

(iii) Additional acquisition of one hotel property
The overview of additional portion of a hotel (Note 1) acquired on October 31, 2017 is as follows:

Use

Hotel

Property
number

Property nameLocation

Acquisition
price(JPY million)

Appraisal value(JPY million)(Note 2)

D43

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

1,849

2,600

SellerCategoryof specified
asset

Trust
Undisclosed (Note 3) BeneficiaryInterest(Note 1) This is the acquisition of hotel floor expanded by conversion in addition to the portion of hotel already owned
by INV.
(Note 2) As the floor expansion portion was under construction at the time of acquisition, the appraisal value shows theresearch value set forth in the research report on the valuation date of June 30, 2017, issued by Morii
Appraisal & Investment Consulting, Inc. The research value shows the difference between (i) the researchvalue of existing hotel portion and floor expansion portion combined, assuming the completion of theconversion (JPY 27,400 million) and (ii) the research value for the existing hotel portion before the additional
acquisition (JPY 24,800 million).
(Note 3) The name of the seller is not disclosed, as the seller’s consent has not been obtained for disclosure.

(e)Overview of Sale of Assets

The Asset Manager decided sales of assets as follows for the purpose of improving the profitability of INV’s portfolio
by rebalancing of assets and stabilizing the distribution by recognizing a gain on sales.

11(i) Sale of one office building and one parking lot
The Asset Manager decided to sell following assets on July 25, 2017, and sales of the assets has been closed on July 31,
2017. The proceeds from the sale was appropriated to the funds for the acquisition described in “(d) Overview ofAcquisition of Assets (iii) Additional acquisition of one hotel property.”
Difference
Acquisition
Book value
Sales price b/w sales price
price(JPY million) (JPY million)
and book(JPY million)(Note 1)
(Note 2)
value
(Note 1)

Transferee

Categoryof specified
asset

163

Undisclosed(Note 3)Trust
BeneficiaryInterest(Note 4)130

29

WastecHOLDINGS Real Property
Co., Ltd.

1,491

192

Property
number

Property name

OfficeBuilding

B08

Kindai Kagaku
Sha Building

1,301

1,197

1,361

Parking Lot

C01

Times
Kanda-Sudacho
4th

97

100

1,398

1,298

Use

Total

(Note 1) The book values are as of July 31, 2017. The difference between sales price and book value is provided forreference purpose. INV recognized a gain on sales of JPY 141 million (of which, JPY 115 million for Kindai
Kagaku Sha Building, and JPY 25 million for Times Kanda-Sudacho 4th) in the December 2017 period, after
deducting sales-related expenses.
(Note 2) Sales prices do not include adjustments for fixed asset taxes or city planning taxes, or national or local
consumption taxes. Hereafter the same.
(Note 3) The name of the transferee is not disclosed, as the transferee’s consent has not been obtained for disclosure.
(Note 4) The trust beneficiary interest of Kindai Kagaku Sha Building was integrated in a single trust account with othertrust accounts when INV procured funds through debt financing backed by trust assets in July 2011. Intransferring the sole trust beneficiary interest of Kindai Kagaku Sha Building by itself, INV incurred some
expenses to detach the asset from the integrated trust account.

(ii) Sale of six residential properties
The Asset Manager decided to sell following assets on December 21, 2017, the sale of the three assets (A56, A62 andA81) has been completed on December 28, 2017, and the sale of the three assets (A31, A36 and A42) has been
completed on January 31, 2017. The proceeds from the sale is appropriated to the funds for the acquisition describedin “c Significant Subsequent Events (a) Acquisition of assets.”

12

Use

Residential

Acquisition
Book value
Sales price
price(JPY million)(JPY million)(JPY million)(Note 1)

Difference
b/w sales
price andbook value(Note 1)

Property
number

Property name

A31

Harmonie
Ochanomizu

1,428

1,346

1,603

256

A36

Growth Maison
Ikebukuro

825

743

1,057

314

A42

Capital Heights
Kagurazaka

604

623

732

108

A56

A62

A81

Casa
Eremitaggio
Lexel Mansion
Ueno
Matsugaya
Sun Terrace
Minami-Ikebuku
ro

Total

Transferee

Categoryof specified
asset

Trust
BeneficiaryInterest(Note 3)

1,070

948

1,312

Undisclosed
363 (Note 2)

970

853

1,329

475

625

591

934

343

5,523

5,106

6,970

1,863

(Note 1) The difference between sales price and book value indicates estimate for reference purpose calculated using
the book values as of December 28, 2017, the date of sale, for the properties sold during the fiscal period
ended December 2017, and as of December 31, 2017 for the remainder; INV recognize a gain on sales of JPY
1,109 million in the fiscal period ended December 2017, and estimate to recognize JPY 594 million for the
fiscal period ending June 2018.
(Note 2) The name of the transferee (a Japanese TMK (Tokutei Mokuteki Kaisha)) is not disclosed, as the transferee’s
consent has not been obtained for disclosure.
(Note 3) Each of the trust beneficiary interest of Harmoni Ochanomizu, Growth Maison Ikebukuro and Capital Heights
Kagurazaka was integrated in a single trust account with other trust accounts when INV procured funds
through debt financing backed by trust assets (the “Trust Asset-Backed Borrowing”) in July 2011. Intransferring the sole trust beneficiary interest of the abovementioned three properties by itself, INV incurred
some expenses to detach from the integrated trust account, effective as of December 22, 2017.

(iii) Sale of three office buildings
The Asset Manager decided to sell following assets on December 26, 2017, the sale of one asset (B09) has been
completed on the date and the sale of two assets (B15 and B16) has been completed on January 31, 2017. The
proceeds from the sale is appropriated to the funds for the acquisition described in “c Significant Subsequent Events (a)Acquisition of assets.”

13

Use

OfficeBuilding

Acquisition
Book value
Sales price
price(JPY million)(JPY million)(JPY million)(Note 1)

Difference
b/w sales
price andbook value(Note 1)

Property
number

Property name

B09

Shinjuku Island

B15

Cross Square
NAKANO

1,060

1,125

1,350

B16

Ohki Aoba
Building

816

725

721

(4)

2,591

2,552

2,776

223

Total

715

701

705

Transferee3

Categoryof specified
asset

Undisclosed
Real Property(Note 2)

Taisei-Yurak
224 u Real Estate
Co.,Ltd
KubotaHontenTrust
BeneficiaryInterest
Trust
BeneficiaryInterest(Note 1) The difference between sales price and book value indicates estimate for reference purpose calculated using thebook values as of December 26, 2017, the date of sale, for the property sold during the fiscal period ended
December 2017, and as of December 31, 2017 for the remainder; INV recognized a loss on sales of JPY 7
million (Shinjuku Island) and an impairment loss of JPY 15 million (Ohki Aoba Building) for the fiscal period
ended December 2017, and estimates to record a gain on sale of JPY 202 million (Cross Square NAKANO) for
the fiscal period ending June 2018.
(Note 2) The name of the transferee (a Japanese business corporation) is not disclosed, as the transferee’s consent has
not been obtained for disclosure.

(f)Overview of Results of Operations and Distributions

As a result of the operations mentioned above, operating revenues for the Reporting Period increased by JPY 3,387
million from the previous period (+36.6%) to JPY 12,647 million, and net income increased by JPY 2,601 million(+55.3%) to JPY 7,303 million. The distribution per unit (“DPU”) for the Reporting Period was JPY 1,564, anincrease of JPY 300 (+23.7%) compared to the previous period.
The majority of INV’s owned hotels use a variable rent scheme linked to performance of the relevant hotel. Hoteldemand is affected by seasonal factors and the fiscal period ending December (from July to December) which include
summer holiday and autumn outing seasons tend to record higher revenue than the fiscal period ending June (fromJanuary to June). Accordingly, INV’s rental revenues tend to be higher in the fiscal period ending December than in thefiscal period ending June.
INV aims to include maximum profit distributions (excluding excess profit distribution) in deductible expenses inaccordance with Section 1 of Article 67-15 of the Act on Special Taxation Measures Law (Act No. 26 of 1957; asamended), and decided to distribute almost all of the profit as defined in Article 136, Paragraph 1 of the Investment
Trust Act, except for fractional distribution per unit less than JPY 1.
INV believes that maintaining the stability of cash distributions over the medium term is one of the most importantfactors in determining the amount of distribution for a given fiscal period. Therefore, INV has adopted the policy tomake distributions in excess of profits in order to stabilize distributions, in cases where dilution of investment units orsignificant expenses are to be recorded in connection with, among other things, the acquisition of assets or the raisingof capital, leading to a temporary decrease in distribution, taking into consideration the level of distribution per unit
assuming such acquisition of assets or capital raising had contributed for a full fiscal period. INV may also consider
making distributions in excess of profits for the purpose of mitigating the impact of corporate tax increase arising fromdifferent rules and practices in tax and accounting, such as treatment on depreciation of fixed term land lease or asset
retirement obligation.
14

With respect to the distribution for the fiscal period ended December 2017, INV will distribute an aggregate amount of
JPY 7,496 million (distribution per unit: JPY 1,564); of which, INV pay JPY 7,323 million as profit distribution, outof distributable profit of JPY 7,326 million which is a total of Net Income for the fiscal period ended December 2017
(JPY 7,303 million) adjusted by loss brought forward from the previous fiscal period and deferred tax gain or loss. In
addition, INV pays excess profit distribution of JPY 172million (JPY 36 per unit)b

Outlook for the Fiscal Period Ending June 30, 2018 and December 31, 2018
The DPU (including excess profit distribution) for the June 2018 and December 2018 periods are forecast to be JPY
1,383 (+9.4% YoY) and JPY 1,562 (-0.1% YoY), respectively. The full year DPU (including excess profit
distribution) for calendar year 2018 is forecast to be JPY 2,945 (+4.1% YoY), providing steady growth.
Future operational policy and issues to be addressed

Since July 2011, INV has enhanced unitholder value by significantly increasing DPU and financial stability with theFortress Group as its sponsor. Since Fortress Group joined under the umbrella of Softbank Group in December 2017,
in addition to continued access to Fortress’s global real estate expertise, INV will seek to leverage the resources thatare expected to become available through SoftBank Group. SoftBank Group has market-leading expertise intechnology 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 increasecustomer engagement. For example, INV plans to pursue opportunities to better manage the increased number offoreign visitors and their related online research, bookings and payments, improve the process in setting hotel rates andmanage 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 synergy with Softbank Group, going forward, INV will continue to implement various
strategies to maintain further growth and financial stability, including the following measures.
•••

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

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

External growth strategy
New Property Acquisitions
As its basic strategy, INV will move forward with the acquisition of new properties focusing on hotels, wherecontinued growth in portfolio revenues is anticipated, and residential properties especially where rental growth canbe achieved. Rent revenue from residential assets and other assets as well as the fixed rent portion from hotels will
also contribute to more stable revenue, which was 67.2% of total revenue (Note 1). This acquisition strategy will
enable INV to build a portfolio with a good balance between growth and stability.
In regards to hotels, INV will take into consideration the trends in foreign travelers visiting Japan, demands ofbusiness and leisure customers in nearby areas, and leasing contract types when making investment decisions, withthe aim of acquiring properties where growth and stability of GOP and rental revenue are forecasted to increase.
On February 7, 2018, INV acquired four hotels as mentioned in below “c Significant Subsequent Events (a)Acquisition of assets.”
In regards to residential properties, INV will analyze occupancy rates, rental market trends, the presence ofcompeting properties among other factors, and consider acquiring properties that have mainly small-type rooms
with strong competitiveness in large cities, in which it believes it can achieve increases in rent.
INV has achieved steady external growth via the sponsor pipeline from the Fortress Group, as follows.
Properties Acquired from affiliates of the Fortress Group (as of the date of this document)

15

Date

Properties acquired

Total acquisition price

September 2012
May 2014
July 2014
February 2015

24 residential properties
Two hotels
18 hotels
Two hotels
11 hotels andthree residential properties
One hotel
Five hotels andone residential property
Four hotels andone residential property
Two hotels
Two residential properties
One hotel
Five hotels (Note 2)
Four hotels
87 properties(of which 56 are hotels and 31 areresidential properties)

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

July 2015
August 2015
January 2016
March 2016
June 2016
March 2017
May 2017
October 2017
February 2018
Total

JPY 35,258 million
JPY 5,069 million
JPY 10,207 million
JPY 66,697 million
JPY 15,900 million
JPY 24,562 million
JPY 8,000 million
JPY 57,444 million (Note 2)
JPY 12,425 million
JPY 307, 889 million(of which hotels: JPY 256, 251 million;
residential: JPY 51,638 million)

The Fortress Group manages four dedicated Japanese real estate funds, including the Fortress Japan Opportunity
Funds I, II, and III. The Fortress Group’s committed equity is over JPY 300 billion and the number of properties
that the Fortress Group is invested in exceeds 1,400. In order to ensure future growth options for the portfolio, INV
entered into an updated MOU with affiliates of the Fortress Group that provides preferential negotiation rights withrespect to the acquisition of 17 hotels and nine residential properties (see the table below) (Note 2). In addition, by
utilizing the property transaction information available through the Fortress Group and INV’s own network, INV
will continuously consider and implement the acquisitions of properties from third parties that will contribute tostability and growth in revenue and cash flow and an increase in DPU.
No.

Asset name

Asset type (Note 3)

Location

No. of rooms

Limited Service Hotel

Minato-ku, Tokyo

327

1

Hotel MyStays Premier Akasaka

2

Rihga Royal Hotel Kyoto

Full Service Hotel

Kyoto-shi, Kyoto

489

3

Hotel MyStays Premier Narita

Full Service Hotel

Narita, Chiba

711

4

Hotel MyStays Premier Sapporo
Park

Full Service Hotel

Sapporo, Hokkaido

418

5

Fusaki Resort Village

Resort Service Hotel

Ishigaki, Okinawa

188

6

Art Hotel Asahikawa

Full Service Hotel

Asahikawa, Hokkaido

265

7

Hotel MyStays Kanazawa Castle

Limited Service Hotel

Kanazawa, Ishikawa

206

8

Hotel MyStays Matsuyama

Full Service Hotel

Matsuyama, Ehime

161

9

Hotel MyStays Ueno East

Limited Hotel

Taito ku, Tokyo

150

10 Hotel MyStays Midosuji Honmachi

Limited Hotel

Osaka, Osaka108

S Hotel Mystays Sapporo Nakajima
11
Park

Limited Service Hotel

Sapporo, Hokkaido

86

12 Flexstay Inn Sakuragicho

Limited Service Hotel

Yokohama, Kanagawa

70

Limited Service Hotel

Taito ku, Tokyo

161

Resort HotelFujiyoshida, Yamanashi

159

15 Hotel Nord Otaru

Limited Service Hotel

Otaru, Hokkaido

98

16 Hotel Sonia Otaru

Limited Service Hotel

Otaru, Hokkaido

94

13

MyCUBE by MYSTAYS Asakusa
Kuramae

14 Hotel MyStays Fuji Onsen Resort

16

Asset name

Asset type (Note 3)

Location

No. of rooms

17 Art Hotel Niigata Station

Full Service Hotel

Niigata, Niigata

304

No.

Hotel subtotal

3,995

18 Gran Charm Hiroo

Residential/Small TypeShibuya ku, Toky

121

19 Plestay Win Kinshicho

Residential/Small Type

Sumida ku, Tokyo92

20 Gran Charm Kichijoji

Residential/Small TypeMusashino, Tokyo28

21 Green Patio Noda

Residential/Small Type

Noda, Chiba

240

22 Dainichi F 45

Residential/Small Type

Urayasu, Chiba

54

23 Gran Charm Urayasu

Residential/Small Type

Urayasu, Chiba

54

24 Gran Charm Urayasu 5

Residential/Small Type

Urayasu, Chiba

54

25 Gran Charm Minami Gyotoku I

Residential/Small Type

Ichikawa, Chiba

52

26 Gran Charm Minami Gyotoku II

Residential/Small Type

Ichikawa, Chiba

48

Residential property subtotal

743

Total

4,738

(Note 1)The percentage indicates composition of rent revenue based on the actual results for the fiscal period ended
December 2017.

(Note 2)

Sheraton Grande Tokyo Bay Hotel acquired by the TMK, of which INV owned the preferred equity interest,
is counted as one property and the INV’s investment amount to the preferred equity interest is counted as theacquisition price of the preferred equity interest.

(Note 3)

The term of validity of the MOU is from September 21, 2017, the date of execution of the updated MOU, toSeptember20, 2018. Regarding the 26 properties listed above, there is no guarantee that INV will be granted
an opportunity for considering acquisition of the properties or be able to acquire the properties.

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

Property Sales
While INV places priority on increasing unitholders’ value through external growth by taking into account the increased
level of activity in the real estate trading market, it also considers the possibility of portfolio optimization upon
consideration of the portfolio sector composition, geographic distribution and competitiveness of each property, as
appropriate and previously detailed in the Asset Recycling Program.
(ii)

Strategy for internal growth(Hotels)
Of the 54 hotels owned by INV as of the end of the Reporting Period, 45 hotels use a variable rent scheme. In thevariable rent scheme, in principle, INV receives all of gross operating profit (GOP) after deducting management
fees for the hotel operator as rents, and as a result INV can directly enjoy the hotel revenue upside. In the casewhere GOP enters into a downward trend, INV could take advantage from the fixed rent portion or downside floor
to protect itself from further loss. For 41 hotels (Note 1), MHM has implemented sophisticated revenue
management seeking to maximize revenue. INV will continue to accurately ascertain and analyze operating
conditions of its hotels, the conditions of nearby hotels, market trends and other factors through operation meetingsand other contact with hotel operators and will focus on operations that maximize rent income.

17

For hotels, renovation of rooms and replacement of fixtures and fittings is indispensable to maintain and increase
revenues. In the fiscal period ending June 2018, INV plans to renovate the following five hotels; Hotel MyStays
Kyoto-Shijo, MyStays Shinurayasu Conference Center, Hotel MyStays Maihama and Hotel MyStays Dojima andHotel Nets Hakodate.
(Residential properties and others)
INV will continue to strengthen its collaborative ties with PM and brokers to further boost occupancy rates andearning capabilities of its properties. With respect to INV’s residential properties, while keeping in mind thehigh-season in the residential rental market that occurs during the June 2018 period, INV will focus on increasing
the occupancy rate and rent for both new lease contracts and lease renewals for each 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
and enhancing the competitiveness and market value of the properties as well as ensuring stable operations andhigh tenant satisfaction. Therefore, INV will continue to monitor current strategic plans with flexible
implementation as it sees fit.
(Note 1)

Hotel MyStays Dojima (former Hotel Vista Premio Dojima), whose operator was changed effective on
August 1, 2017, is included. As of the date of this document, MHM manages 45 hotels in INV’s
portfolio, including the four hotels acquired on February 7, 2018. In addition, MHM will commence tomanagement one hotel as of May 1, 2018.

(iii) Financial strategy
In the Reporting Period, INV further stabilized its financial base executing a public offering in October 2017, byborrowing new loans in connection with the public offering, and strengthening and maintaining relationships withexisting lenders. Going forward, INV will work on diversifying financing measures including issuing investment
corporation bonds. Also, INV seeks to maximize unitholders’ value by way of extension of loan tenor,
diversification of loan maturity dates, further reduction of borrowing costs and improvement of its credit rating.
(iv) Compliance risk management
While the executive officer of INV concurrently serves as the representative director at the Asset Manager, two
supervisory directors (an attorney and a certified public account) oversee the execution of the executive officer’s duties
via the Board of Directors of INV. In addition, the compliance officer of the Asset Manager attends 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 otherrelevant 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.
c

Significant Subsequent Events
INV used the proceeds from the above sales and previous asset sales to acquire four hotels on February 7, 2018 fromaffiliates of the Sponsor, FIG, for a price of JPY 12,425 million and at an average appraisal NOI cap rate of 6.2%. The
four hotels are well located and positioned in their respective sub-markets and are all operated by MHM. This acquisition
was accretive to the portfolio on an NOI basis and occurred without issuing any new debt or equity.
As a result, INV's portfolio comprises of 125 properties (58 hotels, 64 residential properties and three others) with a totalacquisition price of JPY 361,386 million as of the date of this document.

18

INV announced the sale of Lexington Plaza Nishi-Gotanda (“Nishi-Gotanda”), a non-core office building, for JPY 5,160
million at an NOI cap rate of 4.2%, or 3.2% after depreciation. The sale is at a JPY 498 million or 10.7% premium tobook value and a JPY 910 million or 21.4% premium to appraisal value. Furthermore, INV will have JPY 4,700 millionof cash on hand from the sale of Nishi-Gotanda on March 9, 2018, and is currently working on several acquisitions tofurther invest the cash by utilizing the Sponsor pipeline.
(a)Acquisition of assets
The Asset Manager decided to acquire four hotels on February 5, 2018, and acquisition of assets has been closed on
February 7, 2018 as follows:

Use

Appraisal
value(JPY million)(Note 1)

Seller

Property
number

Property nameLocation

Acquisition
price(JPY million)

D54

Hotel MyStays
Yokohama-Kannai

Yokohama,
Kanagawa

5,326

5,380

Ginga Tokutei Mokuteki
KaishaD55

Art Hotel Joetsu

Joetsu, Niigata

2,772

2,800

HL Investments Tokutei
Mokuteki Kaisha

D56

Art Hotel Hirosaki City

Hirosaki,
Aomori

2,723

2,750

Monza Tokutei
Mokuteki Kaisha

D57

Hotel MyStays Oita

Oita, Oita

1,604

1,620

Suisei Tokutei Mokuteki
Kaisha12,425

12,550

Hotel

Total

Categoryof specified
asset

Trust
Beneficial
Interest(Note 1) Appraisal Value is based on appraisal value stated in the appraisal report by the Tanizawa Sōgō Appraisal Co.,
Ltd. on the valuation date of January 1, 2018.
(b)

Use

OfficeBuilding

Sale of asset

Property
number

Property name

B14

Lexington Plaza
Nishi-Gotanda

Difference
Acquisition
Book value
Sales price b/w sales price
price(JPY million) (JPY million)
and book(JPY million)(Note 1)
(Note 2)
value
(Note 1)

4,880

4,639

5,160

520

Transferee

Categoryof specified
asset

Undisclosed(Note 3)Trust
BeneficiaryInterest(Note 4)(Note 1) The book values are as of December 31, 2017. The difference between sales price and book value is provided
for reference purpose. INV estimates to recognize a gain on sales of JPY 395 million in the June 2018 period,
after deducting sales-related expenses.
(Note 2) Sales prices do not include adjustments for fixed asset taxes or city planning taxes, or national or local
consumption taxes.
(Note 3) The name of the transferee is not disclosed, as the transferee’s consent has not been obtained for disclosure.

19

dOperational Outlook
The forecasts of financial results for the fiscal periods ending June 30, 2018 and December 31, 2018 are as follows.
Fiscal period ending June 30, 2018 (from January 1, 2018 to June 30, 2018)
Operating Revenues

JPY 12,784 million

Operating Income

JPY 8,081 million

Ordinary Income

JPY 7,370 million

Net Income

JPY 7,369 million

Total Distribution Amount (Including excess profit distribution)

JPY 6,628 million

Net Income per Unit

JPY 1,537

Distribution per Unit (Excluding excess profit distribution)

JPY 1,383-

Excess Profit Distribution per Unit
Distribution per Unit (Including excess profit distribution)

JPY 1,383

Fiscal period ending December 31, 2018 (from July 1, 2018 to December 31, 2018)
Operating Revenues

JPY 12,884 million

Operating Income

JPY 8,129 million

Ordinary Income

JPY 7,410 million

Net Income

JPY 7,409 million

Total Distribution Amount (Including excess profit distribution)

JPY 7,486 million

Net Income per Unit

JPY 1,545

Distribution per Unit (Excluding excess profit distribution)

JPY 1,562-

Excess Profit Distribution per Unit
Distribution per Unit (Including excess profit distribution)

JPY 1,562

For reference purposes, full-year forecasts are provided below, since hotel revenues are influenced by seasonal
effects.
(Reference) Full-year 2018 (Aggregate of the fiscal periods ending June 2018 and December 2018)
Operating Revenues

JPY 25,668 million

Operating Income

JPY 16,210 million

Ordinary Income

JPY 14,780 million

Net Income

JPY 14,778 million

Total Distribution Amount (Including excess profit distribution)

JPY 14,114 million

Net Income per Unit

JPY 3,082

Distribution per Unit (Excluding excess profit distribution)

JPY 2,945-

Excess Profit Distribution per Unit
Distribution per Unit (Including excess profit distribution)

JPY 2,945

For the assumptions underlying the operational outlook for the fiscal periods ending June 30, 2018 and December 31,
2018, please see “Assumptions Underlying the Forecast of Financial Results and Distribution for the Fiscal Periods
ending June 30, 2018 and December 31, 2018”20

(Cautionary Note regarding Forward Looking Statements)
Forward looking statements such as the forecasts set forth herein are based on information currently available andcertain assumptions that are deemed reasonable. Actual operating performance may vary significantly due to factors
not foreseen at the time of this present notice, such as the occurrence of gains and losses associated with the sale ofproperties, repayment of borrowings and a decrease in rent received. Also, this forecast is not a guarantee of
distribution amounts.

21

<Assumptions Underlying the Forecast of Financial Results and Distribution for the Fiscal Periods ending June 2018 andDecember 2018 >Item
Fiscal period

Assumptions
The June 2018 fiscal period: from January 1, 2018 to June 30, 2018 (181 days)
The December 2018 fiscal period: from July 1, 2018 to December 31, 2018 (184 days)
Assets held as of the end of the June 2018 fiscal period: 123 properties and preferred equity
interests in one special purpose company
Assets held as of the end of the December 2018 fiscal period: 123 properties and preferred
equity interests in one special purpose company

Assets under management

INV assumes the transfer of two office buildings and three residential properties on January 31,
2018, the acquisition of four hotel properties on February 7, 2018 and the transfer of one officebuilding on March 9, 2018 and that there will no other changes through the end of the fiscal
period ending December 2018.
However, INV is considering acquisition of properties during the fiscal period ending June 2018by utilizing the proceeds to be obtained from the sale of one office building on March 9, 2018
As of the end of the June 2018 fiscal period: 4,793,181 units
As of the end of the December 2018 fiscal period: 4,793,181 units

Units outstanding
INV assumes there will be no change to the current 4,793,181 units issued and outstanding
through the end of the fiscal periods.

Balance as of the end of the June 2018 fiscal period: JPY 186,983 million
Balance as of the end of the December 2018 fiscal period: JPY 185,915 million
Interest-bearing liabilities

INV assumes that of the current balance of JPY 186,983 million, INV intends to repay
consumption tax loan of JPY 1,068 million and refinance short term loan of JPY 2,000 million
in December 2018 fiscal period at a similar condition. INV assumes no other new loan or
prepayment of loan through the end of the December 2018 fiscal period.

INV expects to record rental revenues as follows:

Operating revenues

June 2018
Fiscal Period
JPY 11,592 mn(JPY 7,020 mn)(JPY 3,553 mn)(JPY 3,467 mn)
JPY 763 mn

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

December 2018
Fiscal Period
JPY 12,884 mn(JPY 8,316 mn)(JPY 4,320 mn)(JPY 3,995 mn)
JPY 876 mn

INV estimates gain on sales of JPY 796 million from sale of Harmony Ochanomizu, Growth
Maison Ikebukuro and Capital Heights Kagurazaka completed on January 31, 2018, and JPY
395 million from sale of Lexington Plaza Nishi-Gotanda to be completed on March 9, 2018 forthe fiscal period ending June 2018.
Rental revenues in the fiscal period ending June 2018, and the fiscal period ending December
2018 are calculated based on estimates as of today. In addition, INV assumes there will be nodelinquencies or non-payment of rent by tenants

22

Item

Assumptions

Operating revenues

The majority of INV’s owned hotels use a variable rent scheme linked to performance of therelevant hotel. Hotel demand is affected by seasonal factors and the December ending fiscal
period (from July to December) which include summer holiday and autumn outing seasons tend
to record higher revenue than the June ending fiscal period (from January to June). Accordingly,
rental revenue of INV tends to be higher in the December ending fiscal period than in the June
ending fiscal period.
INV expects to incur property related expenses as follows:・Facility management fees(of these, repair costs)
・Taxes and other public charges
・Insurance expenses
・Depreciation expenses
・Other expenses
Total property related expenses(Note)
Operating expenses

June 2018
Fiscal Period
JPY 503 mn(JPY 36 mn)
JPY 459 mn
JPY 11 mn
JPY 2,842 mn
JPY 403 mn
JPY 4,221 mn

December 2018
Fiscal Period
JPY 463 mn(JPY 28 mn)
JPY 538 mn
JPY 14 mn
JPY 2,871 mn
JPY 387 mn
JPY 4,274 mn

Property taxes and city planning taxes on the assets acquired in 2017 are calculated
on a pro-rata basis with the previous owners and settled at the time of acquisition,
and are not recorded for the fiscal period ended December 2017 and recorded fromthe fiscal period ending June 2018 as the amount equivalent to such settlement isincluded in the acquisition cost.

INV expects to incur operating expenses other than the property related expenses as follows:・Other operating expenses(of these, asset management
fees)

June 2018
Fiscal Period
JPY 481 mn

December 2018
Fiscal Period
JPY 479 mn(JPY 275 mn)(JPY 275 mn)

Although the sale of Ohki Aoba Building was implemented on January 31, 2018 which falls into
the fiscal period ending June 2018, the decision of such sale resulting in a loss on sale wasdetermined on December 26, 2017, or during the fiscal period ended December 2017. Therefore,
INV recognizes such loss of JPY 15 million as an impairment loss for the fiscal period ended
December 2017. (Note)
INV expects to record net operating income as follows:
June 2018
Fiscal Period
JPY 10,213 mn
・NOI(of these, hotel NOI)(of these, residential NOI)(of these, TMK dividend)(JPY 6,668 mn)(JPY 2,549 mn)(JPY 763 mn)

December 2018
Fiscal Period
JPY 11,480 mn(JPY 7,898 mn)(JPY 2,522 mn)(JPY 876 mn)

NOI calculation method in the above table is as follows
・NOI＝ Rental Revenues (including TMK dividend, or the amount of dividends on the preferred
equity interests) Property Related Expenses + Depreciation Expenses

23

Item

Non-operating expenses

Assumptions

INV expects to incur non-operating expenses as follows:
June 2018
Fiscal Period
JPY 478 mn
・Interest expense
JPY 233 mn
・Finance related costs
・Other non-operating expenses (of these, expenses relating to public offering)(-)
Total Non-operating expenses
JPY 711 mn

December 2018
Fiscal Period
JPY 484 mn
JPY 234 mn(-)
JPY 719 mn

The distribution per unit is calculated in accordance with the cash distribution policy as set forthin INV’s Articles of Incorporation.
With respect to the distribution for the fiscal period ending June 2018, INV expects to distributean aggregate amount of JPY 6,628 million (distribution per unit: JPY 1,383) which is theremaining amount after retaining JPY 740 million as internal reserve from Net Income for the
fiscal period ending June 2018 (JPY 7,369 million).

Distribution per unit

With respect to the distribution for the fiscal period ending December 2018, INV expects todistribute an aggregate amount of JPY 7,486 million (distribution per unit: JPY 1,562) based on
JPY 7,405 million from Net Income for the fiscal period ending December 2018 (JPY 7,409
million) and JPY 81 million from internal reserve.
For the fiscal periods ending June 2018 and December 2018. The distribution per unit iscalculated based on the assumption that fluctuation of the market value of the interest rate swap
does not affect the distribution per unit.
Distribution per unit may vary due to various factors, including changes of the assets undermanagement, fluctuation of rent income associated with reasons such as change of tenants andoccurrences of unexpected repairs.

24

Item

Assumptions
INV does not assume distributions in excess of profits from allowance for temporary
differences adjustment, based on the assumption that the market value of the interest rate swap
will remain unchanged for fiscal periods ending June 2018 and December 2018.
INV believes maintaining the stability of cash distributions over the medium term is one of themost important factors in determining the amount of distribution for a given fiscal period, andtherefore, INV has adopted the policy to make distributions in excess of profits in order tostabilize distributions, in cases where dilution of investment units or significant expenses are to
be recorded in connection with, among other things, the acquisition of assets or the raising of
capital, leading to a temporary decrease in distribution, taking into consideration the level of
distribution per unit assuming such acquisition of assets or capital raising had contributed for a
full fiscal period.

Excess profit distribution
per unit

INV may also consider making distributions in excess of profits for the purpose of decreasing
the impact from corporate tax increase arising from different rules in tax and accounting
practices, such as treatment on depreciation of fixed term land lease or asset retirement
obligation.
INV will not make distributions in excess of profits for the fiscal period ending June 2018, as
INV intends to retain a certain amount of the net income.
Further, while INV will not make distributions in excess of profits as INV will have a certain
amount of internal reserve, INV intends to distribute a certain amount from internal reserve inorder to cope with the discrepancy between tax and accounting treatment.
June 2018
December 2018
Fiscal Period
Fiscal Period
Excess profit distribution
per unit
INV assumes there will be no amendments to applicable laws and regulations, the taxation
system, accounting standards and other regulations that would affect the foregoing forecasts.

Other

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

25

3. Financial Statements(1)

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

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

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

14,367,140
6,326,653
8
1,984,728
489,098
613,566
0(89)
23,781,107

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

3,192
(218)
2,973
128,867,905(9,412,123)
119,455,782

26,991,646

28,454,395(5,092,225)(5,758,755)

21,899,421

22,695,639

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

262,372(112,316)
150,055
1,065,760(335,109)
730,651
167,845,958
310,881,062

16,946,974
16,946,974

16,828,843
16,828,843

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

17,854,460
1,651,565
587,753
113,592
59,86920,267,241
347,977,146
371,758,254

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

Fiscal period ended
June 30, 2017(as of June 30, 2017)
Liabilities
Current liabilities:
Accounts payable
Short-term loans payable
Current portion of long-term loans payable
Accounts payable-otherAccrued expenses
Income taxes payable
Advances received
Deposits received
Total current liabilities
Non-current liabilities:
Long-term loans payable
Tenant leasehold and security deposits in trust
Tenant leasehold and security deposits
Asset retirement obligations
Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity:
Unitholders’ capital
Surplus:Capital surplus
Deduction of capital surplus
Allowance for temporary differences
adjustment
Other deduction of capital surplus
Total deduction of capital surplus
Capital surplus (net)170,911
175,062
164,764
605
540,675
15,932

254,936
3,068,000
28,979,000
51,836
270,486605
600,752
29,1901,067,951

33,254,807

163,990,000
2,240,373
28,663
31,468

154,936,000
2,215,299
31,680166,290,505

157,182,980

167,358,457

190,437,787

128,984,946

168,798,455

6,264,432

6,264,432*2 -*2 (46,329)(987,516)(1,022,263)(987,516)(1,068,593)

5,276,915

5,195,838

Retained earnings

4,708,487

7,212,580

Total surplus

9,985,403

12,408,419

138,970,350

181,206,874

92,243

113,592

92,243

113,592*1 139,062,593*1 181,320,466

306,421,050

371,758,254

Total unitholders’ equity
Valuation and translation adjustments:
Deferred gains or losses on hedges
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

27

(2)

Statement of Income and Retained Earnings(Unit: JPY thousand)Fiscal period ended
December 31, 2017(from July 1, 2017 to
December 31, 2017)

Fiscal period ended
June 30, 2017(from January 1, 2017 toJune 30, 2017)
Operating revenue
Rental revenue―real estate
Gain on sale of real estate properties

9,260,917-

11,403,236
1,244,033

Total operating revenue

9,260,917

12,647,270

3,518,684

3,962,183
15,677250,000
4,800
15,23037,34789
138,288

Operating expenses
Property related expenses
Impairment loss
Asset management fees
Directors’ compensation
Asset custody fees
Administrative service fees
Provision of allowance for doubtful accounts
Other

250,000
4,800
13,59429,98333
99,360Total operating expenses

3,916,456

4,423,618

5,344,461

8,223,652

70
150
1,077

54
234
507

Total non-operating income

1,297

796

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

377,451
223,228
42,401445,855
304,073
170,817

Operating income
Non-operating income
Interest income
Interest on tax refund
Other

643,080920,746

Ordinary income

Total non-operating expenses

4,702,678

7,303,702

Income before income taxes

4,702,678

7,303,702

605

605

Income taxes
Total income taxes
Net income
Retained earnings (deficit) brought forward
Unappropriated retained earnings

28

605

605

4,702,073

7,303,097

6,414(90,516)

4,708,487

7,212,580

(3)Statement of Changes in Net Assets

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

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

Allowance fortemporarydifferences
adjustment

Other
deduction ofcapital surplus

Total
deduction ofcapital surplus

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

5,276,915

224,225(224,225)－－

6,264,432

8,393,450
224,225

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

224,225(224,225)－－

128,984,946

6,264,432－(987,516)(987,516)

5,276,915

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

Total
surplus

Valuation and translation adjustments
Totalunitholders’equity10,936,747

131,304,019

Deferred
gains or losses
on hedges

Totalvaluation andtranslation
adjustments

151,259

151,259

Total
net assets

131,455,278

8,393,450

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

4,702,073

4,702,073

4,702,073

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

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

7,607,315

4,708,487

9,985,403

138,970,350

92,24392,243139,062,593

29

Fiscal period ended December 31, 2017 (from July 1, 2017 to December 31, 2017)(Unit: JPY thousand)Unitholders’ equity
SurplusCapital surplus
Unitholders’capitalDeduction of capital surplus
Capital surplus

Balance at the beginningof the period
Changes during theperiodIssuance of new
investment units
Distributions fromsurplus
Reversal of allowancefor temporary
differences adjustment
Other excess profit
distribution

128,984,946

Allowance fortemporarydifferences
adjustment

Other
deduction ofcapital surplus

Total
deduction ofcapital surplus

Capital surplus
(net)

－

(987,516)(987,516)

5,276,915(46,329)(46,329)(34,747)(34,747)(34,747)

6,264,432

39,813,508(46,329)

Net income
Changes other thanunitholders’ equity(net)
Total changes during theperiodBalance at the end of theperiod39,813,508－(46,329)(34,747)(81,077)(81,077)

168,798,455

6,264,432(46,329)(1,022,263)(1,068,593)

5,195,838

Unitholders’ equity
SurplusRetainedearnings
Balance at the beginningof the period
Changes during theperiodIssuance of new
investment units
Distributions fromsurplus4,708,487(4,799,004)

Reversal of allowancefor temporary
differences adjustment
Other excess profit
distribution
Net income
Changes other thanunitholders’ equity(net)
Total changes during theperiodBalance at the end of theperiod7,303,097

Total
surplus

Valuation and translation adjustments
Totalunitholders’equity9,985,403

138,970,350

Deferred
gains or losses
on hedges

Totalvaluation andtranslation
adjustments

92,24392,243Total
net assets

139,062,593

39,813,508

39,813,508(4,799,004)(4,799,004)(4,799,004)(46,329)(46,329)(46,329)(34,747)(34,747)(34,747)

7,303,097

7,303,097

7,303,097
21,34821,34821,3482,504,093

2,423,015

42,236,524

21,34821,34842,257,873

7,212,580

12,408,419

181,206,874

113,592

113,592

181,320,466

30

(4)

Statement of Cash Distribution(Unit: JPY)
Fiscal period ended June 30, 2017(from January 1, 2017 to June 30, 2017)

Fiscal period ended December 31, 2017(from July 1, 2017 to December 31, 2017)

4,708,487,837

7,212,580,928

Allowance for temporary
differences adjustment

46,329,888-

Other deduction of capital surplus

34,747,416

172,554,516

4,880,081,536

7,496,535,084( 1,264)( 1,564)

Of which, distributions ofearnings(Distributions of earnings perunit)
Of which, allowance fortemporary differences adjustment(Excess profit distribution perunit (Allowance for temporary
differences adjustment))
Of which, other excess profit
distribution(Excess profit distribution perunit (Other excess profit
distribution))

4,799,004,232

7,323,980,568(1,243)(1,528)46,329,888

-

(12)

-

34,747,416

172,554,516

(9)

( 36)

IV Retained earnings (deficit) carriedforward( 90,516,395)( 111,399,640)

I

Unappropriated retained earnings

II

Excess profit distribution

III Distributions(Distribution per unit)

31Calculation method of distribution
amountAbove, the distribution per unit for theReporting Period is JPY 1,264.
With respect to profit distributions (notincluding Excess Profit Distribution),
INV decided to distribute almost all of
its profit as defined in Article 136,
Paragraph 1 of the Investment Trust Act,
other than fractional amount per unit lessthan JPY 1, aiming to include themaximum amount of profit distributions
in deductible expenses in accordancewith Article 67-15, Paragraph 1 of the
Act on Special Taxation Measures (ActNo. 26, 1957). As a result, thedistribution of earnings per unit (notincluding Excess Profit Distribution perunit) is JPY 1,243.
In addition, in accordance with the
distribution policy as set forth in the
Articles of Incorporation, INV makes
distributions in excess of earnings of theamount that it determines (the “Excess
Profit Distribution”). For the Reporting
Period, INV decided to make Excess
Profit Distribution of JPY 46 million inorder to cope with the discrepancy
between tax and accounting treatment,
making Excess Profit Distribution fromthe allowance for temporary differences
adjustment of JPY 12 per unit. INV
decided to also make Excess Profit
Distribution of JPY 34 million as refundof investment in order to stabilize
distributions, making other Excess Profit
Distribution of JPY 9 per unit.
Under the Reporting Period, deferredgain on hedge of the interest rate swapof JPY 92 million has arisen. Deferredgain on hedge of the interest rate swap isincluded in profit as defined in Article
136, Paragraph 1 of the Investment Trustand Investment Corporation Act, andINV has decided to distribute almost allof the profit as defined in Article 136,
Paragraph 1 of the Investment Trust andInvestment Corporation Act. As a result,retained deficit carried forward of JPY
90 million is recorded.

32

As shown above, the distribution perunit for the Reporting Period is JPY
1,564.
With respect to profit distributions (notincluding Excess Profit Distribution),
INV decided to distribute almost all of
its profit as defined in Article 136,
Paragraph 1 of the Investment Trust Act,
other than fractional amount per unit lessthan JPY 1, aiming to include themaximum amount of profit distributions
in deductible expenses in accordancewith Article 67-15, Paragraph 1 of the
Act on Special Taxation Measures (ActNo. 26, 1957). As a result, thedistribution of earnings per unit (notincluding Excess Profit Distribution perunit) is JPY 1,528.
In addition, in accordance with the
distribution policy as set forth in the
Articles of Incorporation, INV makes
distributions in excess of earnings of theamount that it determines (the “Excess
Profit Distribution”). For the Reporting
Period, INV decided to also make
Excess Profit Distribution of JPY 172
million as refund of investment in orderto stabilize distributions, making other
Excess Profit Distribution of JPY 36 per
unit.
Under the Reporting Period, deferredgain on hedge of the interest rate swapof JPY 113 million has arisen. Deferredgain on hedge of the interest rate swap isincluded in profit as defined in Article
136, Paragraph 1 of the Investment Trustand Investment Corporation Act, andINV has decided to distribute almost allof the profit as defined in Article 136,
Paragraph 1 of the Investment Trust andInvestment Corporation Act. As a result,retained deficit carried forward of JPY
111 million is recorded.

(5)Statement of Cash Flows(Unit: JPY thousand)Fiscal period ended
December 31, 2017(from July 1, 2017 to
December 31, 2017)

Fiscal period ended
June 30, 2017(from January 1, 2017 toJune 30, 2017)
Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Impairment loss
Investment unit issuance costs
Loan-related costs
Interest income
Interest expenses
Increase (decrease) in allowance for doubtful accounts
Decrease (increase) in rental receivable
Decrease (increase) in consumption taxes receivable
Increase (decrease) in accounts payable
Increase (decrease) in consumption taxes payable
Increase (decrease) in accounts payable-other
Increase (decrease) in accrued expenses
Increase (decrease) in advances received
Increase (decrease) in deposits received
Decrease from sales of property, plant and equipment
Decrease from sales of property, plant and equipment in trust
Others, net
SubtotalInterest income received
Interest expenses paid
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities
Purchases of property and equipment
Purchases of property and equipment in trust
Purchases of leasehold rights in trust
Purchase of investment securities
Repayments of tenant leasehold and security deposits
Repayments of tenant leasehold and security deposits in trust
Proceeds from tenant leasehold and security deposits in trust
Payments of tenant leasehold and security deposits
Other, net
Net cash used in investing activities
Cash flows from financing activities
Increase in short-term loans payable
Proceeds from long-term loans payable
Borrowing related expenses
Payment of distributions of earnings
Payment of distribution in excess of retained earnings fromallowance for temporary differences adjustment
Payment of other distributions in excess of retained earnings
Proceeds from issuance of investment units
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

33

4,702,678
2,281,374
42,401
223,228(70)
377,451(1,301)(21,759)(20,823)
81,748(460,521)
25,473444
18,602(21,461)(17,577)
7,209,888
70(379,198)(605)
6,830,155

7,303,702
2,567,215
15,677
170,817304,073(54)445,85555(564,535)(640,464)(7,867)47,721(67,922)
98,06560,077(7,567)802,750
3,590,653(1,274)
14,116,980
54(439,861)(605)
13,676,568(2,395)(26,684,589)(8,187,950)(79,334)
290,004(1,037,651)(2,211)(35,704,126)(797)(42,111,738)(17,854,460)(28,663)(139,629)
115,173(14,807)(60,034,922)

21,571,000(257,922)(5,406,728)

3,068,000
19,925,000(325,727)(4,776,561)-(46,329)

8,351,048
24,257,397(4,616,573)
14,214,734
9,598,161(34,747)
39,644,352
57,453,986
11,095,633
9,598,161
20,693,794

(6)

(7)

Notes to Concerning Going Concerns Assumption
Not applicable
Notes to Concerning Significant Accounting Policies
1. Evaluation standards and evaluation method of assets
Other securitiesThose with no fair value
Cost method through moving-average method is used.
2. Method of depreciation of non-current assets(a) Property and equipment (including assets in trust)The straight-line method is used.
The useful lives of major property, plant and equipment are as follows.
Buildings
77 years
Buildings and accompanying facilities
8-24 years
Structures
18 years
Tools, furniture and fixtures
4-8 years
Buildings in trust
5-67 years
Buildings and accompanying facilities in trust
2-33 years
Structures in trust
3-55 years
Tools, furniture and fixtures in trust
2-19 years(b) Intangible assets
The straight-line method is used. For leasehold rights in trust (fixed-term land lease for business purposes), thestraight-line method based on the lease period is used.
(c) Long-term prepaid expenses
The straight-line method is used.
3. Method of calculating allowances
Allowance for doubtful accounts
To reserve for losses on doubtful accounts, allowances are provided for normal receivables using a rate determinedbased on past bad debt experiences, and specific allowances are provided for accounts with a possibility of default
based on the estimated amounts considered to be uncollectible by considering the collectability of accounts on an
individual basis.
4. Revenue and expense recognition
Accounting treatment of property taxes and other taxes
With respect to property taxes, city planning taxes and depreciable asset taxes, of the tax amount assessed anddetermined, the amount corresponding to the relevant fiscal period is accounted for as property related expenses.
Of the amounts paid to the seller for acquisitions of real estate, the amount equivalent to property taxes is capitalized
as part of the acquisition cost of the real estate instead of being charged as expense. The amount equivalent to property
taxes that was included as part of the acquisition of real estate during the fiscal period ended December 31, 2017 is
JPY 24,256 thousand.
5. Method of hedge accounting(a) Method of hedge accounting
Deferred hedge accounting is used.
(b) Hedging instrument and hedged item
Hedging instrument: interest rate swap
Hedged item: interest on borrowings
34

(c) Hedge policy
INV enters into derivative transactions for the purpose of hedging against the risks set forth in INV’s Articles ofIncorporation in accordance with its risk management policy.
(d) Method of evaluating hedge effectivenessHedge effectiveness is evaluated by comparing the cumulative amount of changes in cash flows of the hedging
instrument and the cumulative amount of changes in cash flows of the hedged item and verifying the difference inthe amounts of change of both the hedged item and the hedging instrument.
6. Cash and cash equivalents as stated in Statement of Cash Flows
Cash and cash equivalents as stated in the Statement of Cash Flows consist of cash on hand and cash in trust, floating
deposits, deposits in trust and short-term investments that are very liquid and realizable with a maturity of threemonths or less when purchased and that are not subject to significant risks of changes in value.
7. Other significant matters which constitute the basis for preparation of financial statements(i) Accounting treatment of trust beneficiary interests in real estate
As to trust beneficiary interests in real estate, all accounts of assets and liabilities within assets in trust, as well as all
income generated and expenses incurred from assets in trust, are recorded in the relevant balance sheets and income
statement accounts. Of such items, the following significant trust assets and liabilities are shown separately on thebalance sheet.
(a) Cash and bank deposits in trust(b) Buildings in trust
Buildings and accompanying facilities in trust
Structures in trust
Tools, furniture and fixtures in trust
Land in trust(c) Leasehold rights in trust(d) Tenant leasehold and security deposits in trust(ii) Accounting treatment of deferred assets
Investment unit issuance costs
The full amount is recorded as expense at the time of expenditure.
(iii) Accounting treatment of consumption taxes
Transactions subject to consumption taxes are recorded at amounts exclusive of consumption taxes.
(Additional Information)(Notes Related to Provision and Reversal of Allowance for Temporary Differences Adjustment)
Fiscal period ended June 30, 2017 (from January 1, 2017 to June 30, 2017)
The following provision was made in the statement of cash distribution:
1. Reasons, related assets and amounts

Related assets, etc.
Leasehold rights in trust

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

Method of reversal
The corresponding amount is scheduled to be reversed upon sale, etc.
35

Fiscal period ended December 31, 2017 (from July 1, 2017 to December 31, 2017)
Not applicable(8)

Notes to the Financial Statements(Notes to the Balance Sheet)*1. Minimum net assets as required by Article 67, Paragraph 4 of the Act on Investment Trusts and Investment Corporations(Unit: JPY thousand)Fiscal period ended
Fiscal period ended
December 31, 2017
June 30, 2017(as of December 31, 2017)(as of June 30, 2017)
50,00050,000*2. Allowance for temporary differences adjustment
Fiscal period ended Fiscal period ended June 30, 2017 (as of June 30, 2017)
1. Reasons, related assets and amounts(Unit: JPY thousand)
Balance atReversalthe end of
duringcurrent
periodperiodRelatedassets, etc.

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

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

224,225-

Total

Allowance
set aside
duringperiod

2. Method of reversal(1) Deferred gains or losses on hedges
Based on changes in the fair value of derivatives used as hedging instruments, the corresponding amount isscheduled to be reversed.
Fiscal period ended December 31, 2017 (as of December 31, 2017)
1. Reasons, related assets and amounts

Relatedassets, etc.

ReasonLeaseholdrights in trust

Depreciationof leasehold
rights

Total

InitialamountBalance atthe end of
previous
periodAllowance
set aside
duringperiod(Unit: JPY thousand)
Balance atReversalthe end of
duringcurrent
periodperiod(46,329-(46,329)-(46,329)(46,329)-(46,329)-(46,329)

2. Method of reversal(1) Leasehold rights in trust
The corresponding amount is scheduled to be reversed upon sale, etc. of the relevant property.

36

(Notes to Statement of Income and Retained Earnings)*1. Real estate rental revenues and expenses
Fiscal period ended
June 30, 2017(from January 1, 2017 toJune 30, 2017)
A.

(Unit: JPY thousand)Fiscal period ended
December 31, 2017(from July 1, 2017 to
December 31, 2017)

Real estate rental revenues

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

8,927,781

11,060,128

333,135

343,1079,260,917

11,403,236

Maintenance costs

646,226

707,458

Taxes and public dues

390,797

470,600

Other revenues
Total

B.

Real estate rental expenses

Property related expenses

Non-life insurance expenses
Depreciation expenses
Other expenses

10,195

11,4992,281,374

2,567,215

190,090

205,408

Total

3,518,684

3,962,183

C.

5,742,232

7,441,052

2,932,843

3,741,186

Real estate rental income (A-B)(Note) Of which, revenue from variable hotel rents*2. Gain on sales of properties
Fiscal period ended June 30, 2017 (from January 1, 2017 to June 30, 2017)
Not applicable

Fiscal period ended December 31, 2017 (from July 1, 2017 to December 31, 2017)(Unit: JPY thousand)
Proceeds from sales ofproperties
Cost of sales ofproperties
Other expenses onsales of properties
Gain on sales ofproperties

Proceeds from sales ofproperties
Cost of sales ofproperties
Other expenses onsales of properties
Gain on sales ofproperties

Kindai Kagaku Sha
Building)

Kanda-Sudacho 4th

Shinjuku Island

Casa Eremitaggio

1,364,791

130,217705,102

1,312,035

1,197,764

100,818

701,931

948,287

51,333

3,658

10,22828,743

115,693

25,740(7,057)335,004

Lexel Mansion Ueno
Matsugaya

Sun Terrace Minami
Ikebukuro

1,329,240

934,980

853,265

591,335

26,547

18,419449,428

325,22437

*3. Impairment loss
Fiscal period ended June 30, 2017 (from January 1, 2017 to June 30, 2017)
Not applicable
Fiscal period ended December 31, 2017 (from July 1, 2017 to December 31, 2017)
Name of property: Ohki Aoba Building
Use

Location

Type

Retail facility

Sendai-shi, Miyagi

Land in trust

Impairment loss
JPY 15,677 thousand

Upon calculating impairment loss, book value of the asset sold was reduced to recoverable value and the amount reduced wasposted in operating expenses as impairment loss for the land in trust. The net sales price which is obtained by subtracting
expected sales expenses from actual selling price is deemed as recoverable value.
(Notes to Statement of Changes in Net Assets)
Number of issuable investment units authorized and number of investment units issued and outstanding
Fiscal period ended
June 30, 2017(from January 1, 2017 toJune 30, 2017)

Fiscal period ended
December 31, 2017(from July 1, 2017 to
December 31, 2017)

Number of issuable investment units

10,000,000 units

10,000,000 units

Number of investment units issued and outstanding

3,860,824 units

4,793,181 units(Notes to Statement of Cash Flows)*1. Relationship between cash and cash equivalents in statement of cash flows and amounts in accompanying balance sheet
is as follows:
Fiscal period ended
June 30, 2017(from January 1, 2017 toJune 30, 2017)
3,532,405(Unit: JPY thousand)Fiscal period ended
December 31, 2017(from July 1, 2017 to
December 31, 2017)
14,367,140

Cash and bank deposits in trust

6,065,755

6,326,653

Cash and cash equivalents

9,598,161

20,693,794

Cash and bank deposits

38

(Notes Related to Lease Transactions)Operating lease transactions (as lessee)
Unexpired lease fees
Fiscal period ended
June 30, 2017(as of June 30, 2017)
312,959(Unit: JPY thousand)Fiscal period ended
December 31, 2017(as of December 31, 2017)
312,959

Due after one year

10,403,515

10,247,035

Total

10,716,474

10,559,994

Fiscal period ended
June 30, 2017(as of June 30, 2017)
6,579,788(Unit: JPY thousand)Fiscal period ended
December 31, 2017(as of December 31, 2017)
7,970,088

Due after one year

47,397,583

56,088,357

Total

53,977,372

64,058,446

Due within one year

Operating lease transactions (as lessor)
Unexpired lease fees

Due within one year

(Notes Related to Financial Instruments)
1.

Status of financial instruments(1) Policy for financial instruments
INV principally conducts its operations through investments in real estate and other specified assets to seek to ensurestable income in the medium to long term.
The policy for raising funds is principally through issuing new investment units or borrowing loans.
Derivative transactions are to be entered into for the purpose of hedging against the risk of future interest rateincreases, etc. and not for speculation.
Surplus funds are managed after carefully taking into account safety, liquidity, the interest rate environment andfinancing.
(2) Nature and extent of risks arising from financial instruments and risk management
The funds raised through borrowings are mainly used to acquire real estate properties or trust beneficiary interest inreal estate (including related acquisition costs) and for the refinancing of existing loans. Liquidity risks relating toloans are managed by the finance department of the Asset Manager 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 a reasonable estimate. Since certain assumptions, etc. are used inestimating the fair value, different assumptions, etc. may result in the variance of such value.

39

2.

Estimated fair value of financial instruments

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

Fair Value

Difference(1) Cash and bank deposits

3,532,405

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

6,065,755

6,065,755-

Total assets

9,598,161

9,598,161-(3) Short-term loans payable

-

-

-

(4) Current portion of long-term loans payable

-

-

-

(163,990,000)(163,990,000)-(163,990,000)(163,990,000)-

92,24392,243-(5) Long-term loans payable
Total liabilities(6) Derivatives

Fiscal period ended December 31, 2017 (as of December 31, 2017)
Book value, fair value and the difference between values as of December 31, 2017 are as follows.
(Unit: JPY thousand)Book Value

Fair Value

Difference(1) Cash and bank deposits

14,367,140

14,367,140-(2) Cash and bank deposits in trust

6,326,653

6,326,653-

Total assets

20,693,794

20,693,794-(3) Short-term loans payable(3,068,000)(3,068,000)-(4) Current portion of long-term loans payable(28,979,000)(28,979,000)-(5) Long-term loans payable(154,936,000)(154,936,000)-(186,983,000)(186,983,000)-

113,592

113,592-

Total liabilities(6) Derivatives(Note 1) Items recorded in the Liabilities Section are shown in parenthesis.
(Note 2) Receivables and payables arising from derivative transactions are recorded in net amounts, and if the total net
amount is a negative amount, such amount is shown in parenthesis.
(Note 1) Methods to calculate fair values of financial instruments(1) Cash and bank deposits(2) Cash and bank deposits in trust(3) Short-term loans payable
Due to the short maturities, the book value of these instruments is deemed a reasonable approximation of the fairvalue, and therefore, the book value is used as the fair value.
(4) Current portion of long-term loans payable(5) Long-term loans payable
Long-term loan with floating interest rates reflecting changes in market rates within a short-term period arestated at their book value as their book value approximate their fair value.
(6) Derivatives
Please refer to the “Notes Related to Derivative Transactions” below.

40

(Note 2) Financial instruments for which fair value is extremely difficult to value

28,663(Unit: JPY thousand)Fiscal period ended
December 31, 2017(as of December 31, 2017)-

2,240,373

2,215,299-

17,854,460

Fiscal period ended
June 30, 2017(as of June 30, 2017)
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Investment securities

Tenant leasehold and security deposits and tenant leasehold and security deposits in trust have no observable market
price, and it is impracticable to reasonably estimate their future cash flows because the repayment dates of those
deposits and the timing of the lessee’s exit from the property are not certain. Thus, their fair value is not disclosed.
Investment securities (preferred equity interest) has no observable market price, and it is impracticable to assess its fairvalue. Thus, its fair value is not disclosed.
(Note 3) Remaining schedule of monetary claims after the closing date of the fiscal period
Fiscal period ended June 30, 2017 (as of June 30, 2017)

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

Cash and bank deposits in trust

6,065,755

-

-

-

-

-

Total

9,598,161

-

-

-

-

-

Fiscal period ended December 31, 2017 (as of December 31, 2017)

Cash and bank deposits(Unit: JPY thousand)Due within Due after one Due after two Due after three Due after four
Due after
one yearto two years to three years to four years to five years
five years
14,367,140-

Cash and bank deposits in trust

6,326,653

-

-

-

-

-

Total

20,693,794

-

-

-

-

-

(Note 4) Repayment schedule of long-term loans payable and other interest-bearing debts after the closing date of the fiscal
periodFiscal period ended June 30, 2017 (as of June 30, 2017)
Due within
one yearLong-term loans payable
Total

-

(Unit: JPY thousand)Due after one Due after two Due after three Due after four
Due after
to two years to three years to four years to five years
five years
46,663,000
48,044,000
55,512,000
13,771,000
46,663,000

48,044,000

55,512,000

13,771,000-

Fiscal period ended December 31, 2017 (as of December 31, 2017)

Short-term loans payable
Current portion of long-termloans payable
Long-term loans payable
Total(Unit: JPY thousand)Due within Due after one Due after two Due after three Due after four
Due after
one yearto two years to three years to four years to five years
five years
3,068,000
28,979,000

-

-

-

-

-

-

54,745,000

50,130,000

32,821,000

10,115,000

7,125,000

32,047,000

54,745,000

50,130,000

32,821,000

10,115,000

7,125,000

41

(Notes Related to Investment Securities)
Fiscal period ended June 30, 2017 (as of June 30, 2017)
Not applicable
Fiscal period ended December 31, 2017 (as of December 31, 2017)
Other securities
Preferred equity interest (JPY 17,854,460 thousand in the balance sheet) has no observable market price, and it isimpracticable to assess its fair value. Thus, its fair value is not disclosed.
(Notes Related to Derivative Transactions)1.

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

Derivative transactions to which hedge accounting is applied
Fiscal period ended June 30, 2017 (as of June 30, 2017)
The contract amount as of the closing date under each hedge-accounting method and the amount equivalent to thenotional principal prescribed in the contracts are as shown below.
(Unit: JPY thousand)
Method of hedge
accounting

Derivativetransaction type, etc.

Primary
hedged item

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

Fair value (*2)

Long-term
Interest rate swap
loans
99,119,000
99,119,000
92,243
Receive floating
payablerate/pay fixed rate
(Note 1) The contract amount, etc. is stated based on a notional principal.
(Note 2) The fair value is estimated based on the price, etc. presented by the correspondent financial institutions.
Principle
accounting method

Fiscal period ended December 31, 2017 (as of December 31, 2017)
The contract amount as of the closing date under each hedge-accounting method and the amount equivalent to thenotional principal prescribed in the contracts are as shown below.
(Unit: JPY thousand)
Method of hedge
accounting

Derivativetransaction type, etc.

Primary
hedged item

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

Fair value (*2)

Long-term
Interest rate swap
loans
99,119,000
70,140,000
113,592
Receive floating
payablerate/pay fixed rate
(Note 1) The contract amount, etc. is stated based on a notional principal.
(Note 2) The fair value is estimated based on the price, etc. presented by the correspondent financial institutions.
Principle
accounting method(Notes Related to Retirements Payments)
Not applicable42

(Notes Related to Asset Retirement Obligations)1.

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

2.

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

3.

Increase/decrease in the total amount of asset retirement obligations
Fiscal period ended
June 30, 2017(from January 1, 2017 toJune 30, 2017)31,260208
31,468

Balance at the beginning of the period
Increase due to the acquisition of properties
Accretion expense
Balance at the end of the period(Unit: JPY thousand)Fiscal period ended
December 31, 2017(from July 1, 2017 to
December 31, 201)
31,468212
31,680(Notes Related to Segment and Related Information)
I. Segment Information
Disclosure is omitted because the real estate investment business is INV’s sole business and it has no reportable segments.
II. Related Information
Fiscal period ended June 30, 2017 (from January 1, 2017 to June 30, 2017)
1. Information about each product and service
Disclosure is omitted because net sales to external customers for a single product/service category accounted forover 90% of the operating revenue on the statement of income.
2. Information about each geographic area
(1) Net sales
Disclosure is omitted because net sales to external customers in Japan accounted for over 90% of the operating
revenue on the statement of income.
(2) Property and equipment
Disclosure is omitted because the amount of property and equipment located in Japan accounted for over 90% of
the amount of property and equipment on the balance sheet.
3. Information about each major customer(Unit: JPY thousand)Name of customer

Operating revenues
3,852,826

MyStays Hotel Management Co., Ltd.

Related segment
Real Estate Investment

Fiscal period ended December 31, 2017 (from July 1, 2017 to December 31, 2017)
1. Information about each product and service
Disclosure is omitted because net sales to external customers for a single product/service category accounted forover 90% of the operating revenue on the statement of income.
2. Information about each geographic area
(1) Net sales
Disclosure is omitted because net sales to external customers in Japan accounted for over 90% of the operating
revenue on the statement of income.

43

(2) Property and equipment
Disclosure is omitted because the amount of property and equipment located in Japan accounted for over 90% of
the amount of property and equipment on the balance sheet.
3. Information about each major customer(Unit: JPY thousand)Name of customer

Operating revenues
4,794,080

MyStays Hotel Management Co., Ltd.

44

Related segment
Real Estate Investment

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

Residences

Book value

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

Fair value at the end of the period

OfficesBook value

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

Fair value at the end of the period

Commercial facilities

Book value

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

Fair value at the end of the period

Parking lots

Book value

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

Fair value at the end of the period

HotelsBook value

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

Fair value at the end of the period

Total

Book value

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

Fair value at the end of the period

45

Fiscal period ended
June 30, 2017(from January 1, 2017 toJune 30, 2017)(Unit: JPY thousand)Fiscal period ended
December 31, 2017(from July 1, 2017 to
December 31, 2017)67,835,839

93,113,195

25,277,356(3,163,531)

93,113,195

89,949,664

104,752,000

102,353,000

8,440,981

8,424,734(16,247)(1,949,803)

8,424,734

6,474,931

7,636,000

6,130,000

5,049,226

5,001,269(47,956)(43,977)

5,001,269

4,957,292

5,980,000

6,100,000

100,819

100,818(1)(100,818)

100,818-

113,000-

178,511,427

185,897,957

7,386,530

40,430,059

185,897,957

226,328,017

245,021,000

285,424,000

259,938,294

292,537,976

32,599,681

35,171,929

292,537,976

327,709,905

363,502,000

400,007,000

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

46

(Notes Related to Tax Accounting)
1. Significant components of deferred tax assets and liabilities(Unit: JPY thousand)Fiscal period ended
June 30, 2017

Fiscal period ended
December 31, 2017

(Deferred tax assets - current assets)
996

1,331

Impairment loss

-

2,367

Allowance for doubtful accounts

1028

Subtotal

1,006

3,726

Valuation allowanceEnterprise tax payable

1,006

3,726

Total

-

-

(Deferred tax assets, net)--(Deferred tax assets - non-current assets)
689,159

730,990

Land (merger)

2,092,087

1,918,655

Loss carried forward

7,200,289

7,200,289

9,987

10,05542,14979,644

10,033,674

9,939,635

Buildings and other (merger)

Asset retirement obligations
Depreciation of fixed-term leasehold rights
Subtotal(Deferred tax liabilities – non-current liabilities)
Removal expenses included in asset retirement
obligations
Deferred gains or losses on hedges

9,797

9,797

29,27836,054

Subtotal

39,07545,851

9,994,598

9,893,783

Total

-

-

(Deferred tax assets, net)--

Valuation allowance

2. Significant difference between statutory tax rate and the effective tax rate
(Unit: %)Fiscal period ended
June 30, 2017

Fiscal period ended
December 31, 2017
31.74

31.74

Deductible cash distributions(32.06)(30.49)Changes in valuation allowance

0.32(1.25)

Others0.02

0.01

Effective tax rate

0.01

0.01

Statutory tax rate

(Notes Related to Equity-Method Income)Not applicable47

(Notes Related to Transactions with Related Parties)
1.

Transactions with Parent Company and Major Unitholders
Fiscal period ended June 30, 2017 (from January 1, 2017 to June 30, 2017)Classification

Name

Address

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

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

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

Statedcapital(JPY
million)Type oftransaction

Transaction
amount(JPY
thousand)(Note 1)

Account

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

Seller oftrust
beneficiaryinterests inreal estate

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

-

-

-

Seller oftrust
beneficiaryinterests inreal estate

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

-

-

-

-

Seller oftrust
beneficiaryinterests inreal estate

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

Accounts
receivable

198,247

Percentage
Relationshipof votingBusiness orrightsCommon Businessoccupation
ownedboard relation(%)
membership

Investment

0.1 management-business

Investment

0.1 management-business

Investment

0.1 managementbusiness

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

Minato-ku,
Tokyo

10

Hotel
business--

Lesseeandoperatorof hotels

Rentalrevenues

549,169

MyStays HotelManagement
Co., Ltd.
(Note 3)

Minato-ku,
Tokyo

100

Hotel
business--

Lesseeandoperatorof hotels

Rentalrevenues

3,852,826(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)

Accounts
1,043,190
receivable

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

Purchase Price(JPY thousand)

Property Number

Name of Property

Counterparty

A105

Royal Parks Tower Minami-Senju

Sakura Tokutei Mokuteki Kaisha

21,879,000A106Royal Parks Seasir Minami-Senju

Momo Tokutei Mokuteki Kaisha

2,683,000

D49

Hotel MyStays Premier Hamamatsucho Septentrio 2 Tokutei Mokuteki Kaisha
Total

8,000,000
32,562,00048

Fiscal period ended December 31, 2017 (from July 1, 2017 to December 31, 2017)Classification

Name

Address

HL Investments
Tokutei
Minato-ku,
Mokuteki Kaisha
Tokyo

Statedcapital(JPY
million)Type oftransaction

Transaction
amount(JPY
thousand)(Note 1)

Account

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

Purchase of
Seller of
trust
trust
beneficiary
beneficiary interests ininterests in real estate
real estate(Note 2)
(Note 5)

13,068,000

-

-

-

Purchase of
Seller of
trust
trust
beneficiary
beneficiary interests ininterests in real estate
real estate(Note 2)
(Note 5)9,781,000---

Purchase of
Seller of
trust
trust
beneficiary
beneficiary interests ininterests in real estate
real estate(Note 2)
(Note 5)8,870,000

-

-

-

-

Purchase of
Seller of
trust
trust
beneficiary
beneficiary interests ininterests in real estate
real estate(Note 2)
(Note 5)7,880,000--

130,953

Percentage
Relationshipof votingBusiness orrightsCommon Businessoccupation
owned
board
relation(%)
membership

Investment
0.1 managementbusiness-(Note 3)Septentrio3
Tokutei Mokuteki Minato-ku,
KaishaTokyo(Note 3)

MonzaTokutei
Minato-ku,
Mokuteki Kaisha
Tokyo
(Note
3)
Interested partyof the AssetManager

Investment
0.1 managementbusiness

Investment
0.1 managementbusiness--

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

Investment
0.1 managementbusiness

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

Minato-ku,
Tokyo

10

Hotel
business--

Lessee andoperator of
hotelsRentalrevenues

1,103,226

Accounts
receivable

MyStays HotelManagement
Co., Ltd.
(Note 3)

Minato-ku,
Tokyo

100

Hotel
business--

Lessee andoperator of
hotelsRentalrevenues

4,794,080

Accounts
1,551,920
receivable(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)

Consumption taxes, etc., are not included in transaction amounts, but are included in the balance at the end of the period.
The terms and conditions have been determined based on the Asset Manager’s internal rules and manual regarding transactions with thesponsor company.
HL Investments Tokutei Mokuteki Kaisha, Septentrio3 Tokutei Mokuteki Kaisha, Monza Tokutei Mokuteki Kaisha, Suisei Tokutei
Mokuteki Kaisha and Naqua Hotel & Resorts Management Co., Ltd. and MyStays Hotel Management Co., Ltd. have no capital
relationship to be disclosed with the Asset Manager. However, these Tokutei Mokuteki Kaisha or the tenant and operator have received
an anonymous partnership investment or investment through funds that are managed by affiliates of Fortress Investment Group LLC(“FIG”), an affiliate of Calliope. Accordingly, INV treats HL Investments Tokutei Mokuteki Kaisha, Septentrio3 Tokutei Mokuteki
Kaisha, Monza Tokutei Mokuteki Kaisha, Suisei Tokutei Mokuteki Kaisha and Naqua Hotel & Resorts Management Co., Ltd. and
MyStays Hotel Management Co., Ltd. as the equivalent to interested parties.
Calliope holds 609,942 units (holding percentage: 12.7%) of the issued investment units of INV.
The purchase of trust beneficiary interests pertains to the following properties. The transaction amount is the purchase price stated in thetrust beneficiary purchase agreement, to which other expenses for acquisition, property taxes, city planning taxes and consumption taxes
are not included.

Purchase Price(JPY thousand)

Property Number

Name of Property

Counterparty

D50

Hotel MyStays Shin Osaka
Conference Center

HL Investments Tokutei Mokuteki Kaisha

13,068,000

D51

Hotel MyStays Premier Omori

Septentrio3 Tokutei Mokuteki Kaisha

9,781,000

D52

Beppu Kamenoi Hotel

Monza Tokutei Mokuteki Kaisha

8,870,000

D53

Hotel MyStays Sapporo Station

Suisei Tokutei Mokuteki Kaisha

7,880,000

Total

39,599,000

49

2.

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

3.

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

4.

Transactions with Directors and Major Unitholders
Fiscal period ended June 30, 2017 (from January 1, 2017 to June 30, 2017)
Balance atTransaction
Ratio ofClassification

Name

Business or occupation

the end ofamountvoting rights

Details of transaction

(%)

(JPY

Account

thousand)

Directors andclose
relatives

Naoki
Fukuda(Note 3)

Payment of asset

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

the period

management fees to-Consonant Investment

Investment Management

253,256

Management Co., Ltd.

Co., Ltd.

Accruedexpenses

135,000(Note 1)
Payment ofadministrative agency

Same asSame as

above

above

fees for organizational
Same as above-

management to600

Consonant Investment

Accrued324

expenses

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

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

(Note 2)

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

(Note 3)

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

Fiscal period ended December 31, 2017 (as of December 31, 2017)
Balance atTransaction
Ratio ofClassification

Name

Business or occupation

the end ofamountvoting rights

Details of transaction

(%)

(JPY

Account

thousand)

Directors andclose
relatives

Naoki
Fukuda(Note 3)

Payment of asset

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

the period

management fees to-Consonant Investment

Investment Management

276,823

Management Co., Ltd.

Co., Ltd.

Accruedexpenses

159,138(Note 1)
Payment ofadministrative agency

Same asSame as

above

above

fees for organizational
Same as above-

management toConsonant Investment

1,100

Accruedexpenses

864

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

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

(Note 2)

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

50

(Note 3)

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

51

(Notes Related to Per Unit Information)
Fiscal period ended
December 31, 2017(from July 1, 2017 to
December 31, 2017)

Fiscal period ended
June 30, 2017(from January 1, 2017 toJune 30, 2017)
Net assets per unit

JPY 36,019

JPY 37,829

Net income per unit

JPY 1,241

JPY 1,712

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

4,702,073

Fiscal period ended
December 31, 2017(from July 1, 2017 to
December 31, 2017)
7,303,097--

4,702,073

7,303,097

3,788,254

4,266,437

Fiscal period ended
June 30, 2017(from January 1, 2017 toJune 30, 2017)
Net income (JPY thousand)Amounts not attributable to common unitholders(JPY thousand)Net income attributable to common units(JPY thousand)Average number of investment units during the period(units)(Notes Related to Significant Subsequent Events)
1. Sale of Assets
INV completed sale of the following five properties on January 31, 2018.
Property Number: A31

Property Name: Harmonie Ochanomizu

Sale Date

January 31, 2018

Location

Bunkyo-ku, Tokyo

Book Value (Note 1)

JPY 1,346 million

Sales Price (Note 2)

JPY 1,603 million

Expected Gain on Sales (Note 3)

JPY 220 million

Transferee

Not disclosed (Note 4)

Legal Form of Asset

Trust beneficiary interest

Property Number: A36

Property Name: Growth Maison Ikebukuro

Sale Date

January 31, 2018

Location

Toshima-ku, Tokyo

Book Value (Note 1)

JPY 743 million

Sales Price (Note 2)

JPY 1,057 million

Expected Gain on Sales (Note 3)

JPY 288 million

Transferee

Not disclosed (Note 4)

Legal Form of Asset

Trust beneficiary interest

52

Property Number: A42

Property Name: Capital Heights Kagurazaka

Sale Date

January 31, 2018

Location

Shinjuku-ku, Tokyo

Book Value (Note 1)

JPY 623 million

Sales Price (Note 2)

JPY 732 million

Expected Gain on Sales (Note 3)

JPY 87 million

Transferee

Not disclosed (Note 4)

Legal Form of Asset

Trust beneficiary interest

Property Number: B15

Property Name: Cross Square NAKANOSale Date

January 31, 2018

Location

Nakano-ku, Tokyo

Book Value (Note 1)

JPY 1,125 million

Sales Price (Note 2)

JPY 1,350 million

Expected Gain on Sales (Note 3)

JPY 199 million

Transferee

Taisei-Yuraku Real Estate Co., Ltd

Legal Form of Asset

Trust beneficiary interest

Property Number: B16

Property Name: Ohki Aoba Building

Sale Date

January 31, 2018

Location

Sendai-shi, Miyagi

Book Value (Note 1)

JPY 709 million

Sales Price (Note 2)

JPY 721 million

Expected Gain on Sales (Note 3)-

Transferee

Kubota Honten

Legal Form of Asset

Trust beneficiary interest

INV decided on February 13, 2018 to sell the following property, and plans to sell it on March 9, 2018.
Property Number: B14

Property Name: Lexington Plaza Nishigotanda

Anticipated Sale Date

March 9, 2018

Location

Shinagawa-ku, Tokyo

Book Value (Note 1)

JPY 4,639 million

Sales Price (Note 2)

JPY 5,160 million

Expected Gain on Sales (Note 3)

JPY 431 million

Transferee

Not disclosed (Note 4)

Legal Form of Asset

Trust beneficiary interest(Note 1) Book value is the book value as of December 31, 2017.
(Note 2) Sales price does not include sales-related expenses, adjustments for property taxes or city planning taxes, or
national or local consumption taxes.
53

(Note 3) The amount of difference between sales price and book value, and after deducting expected sales-related
expenses.
(Note 4) The name of the transferee is not disclosed, as the transferee’s consent has not been obtained for disclosure.
(Note 5) For details of the sales assets, please refer to “5. Reference Information; (2) Real Estate Properties, Etc.” laterin this document.

2. Acquisition of Assets
On February 5, 2018, INV decided to acquire the following four hotel properties and concluded a purchase and sale agreementon the same day. INV completed the acquisition on February 7, 2018, using the proceeds from the sales outlined in “1. Sale ofAssets” to fund part of the acquisition.
Property Number: D54

Property Name: Hotel MyStays Yokohama Kannai

Acquisition Date

February 7, 2018

Acquisition Price (Note)

JPY 5,326 million

Location

Yokohama-shi, Kanagawa

Completion Date

August 2016

Legal Form of Asset

Trust beneficiary interest

SellerGinga Tokutei Mokuteki Kaisha

Total Floor Area

4,567.24m2

Leasable Area

4,567.24m2

Property Number: D55

Property Name: Art Hotel Joetsu

Acquisition Date

February 7, 2018

Acquisition Price (Note)

JPY 2,772 million

Location

Joetsu-shi, Niigata

Completion Date

November 1993

Legal Form of Asset

Trust beneficiary interest

Seller

HL Investments Tokutei Mokuteki Kaisha

Total Floor Area

7,551.78m2

Leasable Area

7,551.78m2

Property Number: D56

Property Name: Art Hotel Hirosaki City

Acquisition Date

February 7, 2018

Acquisition Price (Note)

JPY 2,723 million

Location

Hirosaki-shi, Aomori

Completion Date

August 1989

Legal Form of Asset

Trust beneficiary interest

SellerMonza Tokutei Mokuteki Kaisha

Total Floor Area

18,889.26m2

Leasable Area

18,889.26m2

54

Property Number: D57

Property Name: Hotel MyStays Oita

Acquisition Date

February 7, 2018

Acquisition Price (Note)

JPY 1,604 million

Location

Oita-shi, Oita

Completion Date

July 2007

Legal Form of Asset

Trust beneficiary interest

SellerSuisei Tokutei Mokuteki Kaisha

Total Floor Area

3,766.72m2

Leasable Area

3,766.72m2(Note)

Acquisition price is based on the purchase price indicated in the relevant purchase agreement and does notinclude acquisition-related expenses, adjustments for property taxes or city planning taxes, or national or local
consumption taxes.

55

(9)

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

Type of Issue

Total Number of Investment
Units Issued and Outstanding
Increase

Total

Unitholders’ Equity (JPY)
Increase

Total

Reference

January 18, 2002

Private placement
for incorporation

400

400

200,000,000

200,000,000(Note 1)

December 26, 2003

Private placement

2,700

3,100

1,012,500,000

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

Private Placement

1,350

4,450

506,250,000

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

Private placement

1,333

5,783

499,875,000

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

Private placement

267

6,050

100,125,000

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

Private placement

800

6,850

300,000,000

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

Private placement

266

7,116

99,750,000

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

Private placement

800

7,916

300,000,000

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

Private placement

1,333

9,249

499,875,000

3,518,375,000(Note 2)

May 17, 2004

Public offering

9,000

18,2493,377,250,000

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

Public offering

10,65028,8993,937,667,100

10,833,292,100(Note 4)

July 31, 2006

Public offering

25,00053,8998,301,125,000

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

Unit split

215,596

269,495-

19,134,417,100(Note 6)

February 1, 2010

Merger367,200

636,695-

19,134,417,100(Note 7)

711,597

1,348,292

6,999,979,689

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

1,573,179

2,999,992,580

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

Third-party
allotment
Third-party
allotment

July 16, 2014

Public offering

1,040,000

2,613,179

22,747,920,000

51,882,309,369(Note 10)

August 13, 2014

Third-party
allotment

55,5072,668,686

1,214,104,611

53,096,413,980(Note 11)

July 15, 2015

Public offering

500,000

3,168,686

27,970,500,000

81,066,913,980(Note 12)

August 12, 2015

Third-party
allotment

25,0003,193,686

1,398,525,000

82,465,438,980(Note 13)

March 30, 2016

Public offering

459,5123,653,198

36,123,157,344

118,588,596,324(Note 14)

22,626

3,675,824

1,778,675,112

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

3,675,824

224,225,264

120,591,496,700(Note 16)

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 17)

October 12, 2017

Public offering

887,959

4,748,783

37,917,625,218

166,902,571,918(Note 18)

November 1, 2017

Third-party
allotment

44,3984,793,181

1,895,883,396

168,798,455,314(Note 19)56

(Note 1)

INV was incorporated through a private placement at a price of JPY 500,000 per unit.

(Note 2)

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

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

(Note 4)

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

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

(Note 6)(Note 7)

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

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

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

(Note 10) New investment units were issued in a public offering at a price of JPY 22,688 per unit (JPY 21,873 after deducting theunderwriters’ discount) to raise funds for the acquisition of new properties.
(Note 11) New investment units were issued in a third party allotment at a price of JPY 21,873 per unit for the purpose of cash reserve toappropriate to repayment in future borrowings.
(Note 12) New investment units were issued in a public offering at a price of JPY 57,817 per unit (JPY 55,941 after deducting theunderwriters’ discount) to raise a part of the funds for the acquisition of new properties.
(Note 13) New investment units were issued in a third party allotment at a price of JPY 55,941 per unit for the purpose of allocation to cash
reserves to be used as part of the funds for future acquisition of properties.
(Note 14) New investment units were issued in a public offering at a price of JPY 81,217 per unit (JPY 78,612 after deducting theunderwriters’ discount) to raise a part of the funds for the acquisition of new properties.
(Note 15) New investment units were issued in a third party allotment at a price of JPY 78,612 per unit for the purpose of allocation to cash
reserves to be used as a part of the funds for future acquisition of properties.
(Note 16) Reversal of allowance for temporary differences adjustment was decided at the meeting of the Board of Directors of INV held
on February 22, 2017 and the amount was incorporated into unitholders’ capital.
(Note 17) New investment units were issued in a public offering at a price of JPY 46,897 per unit (JPY 45,370 after deducting theunderwriters’ discount) to raise a part of the funds for the acquisition of new properties.
(Note 18) New investment units were issued in a public offering at a price of JPY 44,118 per unit (JPY 42,702 after deducting theunderwriters’ discount) to raise a part of the funds for the acquisition of new properties.
(Note 19) New investment units were issued in a third party allotment at a price of JPY 42,702 per unit for the purpose of allocation to
cash reserves to be used as part of the funds for future acquisition of specified assets.

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

57

5. Reference Information(1)

Composition of INV’s Assets

Type of
Purpose

Geographic area

asset

(Note 1)

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

Amount held
(JPY million)(Note 2)

Greater Tokyo
area
Major regional
Residences
citiesSubtotal
Greater Tokyo
area
Offices/Commercial Major regional
Facilities
citiesSubtotalRealestateGreater Tokyo
area
Major regional
Parking lots, etc.
citiesSubtotal
Greater Tokyo
area
Major
regional
HotelscitiesSubtotal
Total real estate
Greater Tokyo
area
Major regional
Residences
citiesSubtotal
Greater Tokyo
area
Offices/Commercial Major regional
Facilities
citiesReal
Subtotalestate inGreater Tokyo
trust
area
Major regional
Parking lots, etc.
citiesSubtotal
Greater Tokyo
area
Major regional
HotelscitiesSubtotal
Total real estate in trust
Preferred equity interest (Note 3)
Deposits and other assets
Total assets (Note 4)(Note 1)
(Note 2)
(Note 3)Fiscal period ended December 31, 2017(as of December 31, 2017)
Percentage of
total assets(%)

Amount held
(JPY million)(Note 2)

-

-

-

-

-

-

-

-

-

-

-

-

703

0.2

-

-

-

-

-

-

703

0.2

-

-

100

0.0

-

-

-

-

-

-

100

0.0

-

-

2

0.0

2

0.0

-

-

-

-

2
806

0.0
0.3

2
2

0.0
0.0

77,07325.2

74,091

19.9

16,0395.2

15,858

4.3

93,11330.4

89,949

24.2

6,990

2.3

5,765

1.6

5,732

1.9

5,666

1.5

12,722

4.2

11,432

3.1

-

-

-

-

-

-

-

-

-

-

-

-

109,90735.9

121,22532.6

75,98824.8

105,09928.3

185,895

60.7

226,32560.9

291,73195.2

327,706

88.2

-

-

17,854

4.8

13,883

4.5

26,193

7.0

306,421100.0

371,758

100.0(292,537)(95.5)(327,709)(88.2)“Greater Tokyo area” refers to Tokyo, Kanagawa, Chiba and Saitama.
“Amount held” is from the balance sheet as of the end of the reporting period and is calculated by deducting accumulated depreciation fromthe acquisition price (including acquisition related costs).
Preferred equity interest issued by Kingdom Special Purpose Company, with the Sheraton Grande Tokyo Bay Hotel as an underlying asset(asset in trust of trust beneficiary interest acquired by Kingdom Special Purpose Company, which is the real estate that serves as the main
source of revenue for Kingdom Special Purpose Company).

58

(Note 4)

The figures indicated in parenthesis under “Total assets” show the amounts related to owned real estate (excluding the amount ofpreferred equity interest owned).

Total Liabilities
Total Net Assets
Total Liabilities
and Net Assets

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

Fiscal period ended December 31, 2017(as of December 31, 2017)
Percentage ofAmount (JPY million)
total assets (%)
190,43751.2

139,06245.4

181,32048.8

306,421100.0

371,758

100.0

59

(2)

Real Estate Properties, Etc.
The following summarizes the real estate and real estate held in trust as well as preferred equity interest that INV held
as of December 31, 2017.

aProperty
number(Note 1)Price and investment percentage

Name of property

A26

Nisshin Palacestage Daitabashi

A27

Nisshin Palacestage
Higashi-Nagasaki

A28

Growth Maison Gotanda

A29

Growth Maison Kameido

A30

Emerald House

A31

Harmonie Ochanomizu

A32

Suncrest Shakujii-Koen

A33

Growth Maison Shin-Yokohama

A34

Belle Face Ueno-Okachimachi

A35

Grand Rire Kameido

A36

Growth Maison Ikebukuro

A37

Growth Maison Yoga

A38

Route Tachikawa

A39

Shibuya-Honmachi Mansion

A40

City Heights Kinuta

A41

Acseeds Tower
Kawaguchi-Namiki

A42

Capital Heights Kagurazaka

BalanceAcquisition
sheet
price
Legal form
carrying(JPY
of assetvalue
million)(JPY(Note 3)
million)Location(Note 2)Trust
beneficiaryinterests(Note 7)Trust
beneficiary
5-4-1 Nagasaki, Toshima-ku, Tokyo
interests(Note 7)Trust
2-26-6 Nishi-Gotanda,
beneficiary
Shinagawa-ku, Tokyo
interests(Note 7)Trust
beneficiary
6-58-16 Kameido, Koto-ku, Tokyo
interests(Note 7)Trust
beneficiary
3-27-18 Itabashi, Itabashi-ku, Tokyo
interests(Note 7)Trust
2-5-5 Yushima, Bunkyo-ku, Tokyo
beneficiaryinterests
Trust
3-15-35 Takanodai, Nerima-ku,
beneficiaryTokyo
interests(Note 7)Trust
3-16-2 Shin-Yokohama, Kohoku-ku, beneficiary
Yokohama-shi, Kanagawa
interests(Note 7)Trust
1-27-5 Higashi-Ueno, Taito-ku,
beneficiaryTokyo
interests(Note 7)Trust
beneficiary
3-39-12 Kameido, Koto-ku, Tokyo
interests(Note 7)Trust
3-31-14 Nishi-Ikebukuro,
beneficiary
Toshima-ku, Tokyo
interests
Trust
1-15-15 Okamoto, Setagaya-ku,
beneficiaryTokyo
interests(Note 7)Trust
3-7-6 Nishikicho, Tachikawa-shi,
beneficiaryTokyo
interests(Note 7)Trust
2-35-2 Honmachi, Shibuya-ku,
beneficiaryTokyo
interests(Note 7)Trust
beneficiary
4-13-15 Kinuta, Setagaya-ku, Tokyo
interests(Note 7)Trust
2-5-13 Namiki, Kawaguchi-shi,
beneficiary
Saitamainterests(Note 7)
Trust
71-1 Enokicho, Shinjuku-ku, Tokyo beneficiaryinterests
1-31-2 Izumi, Suginami-ku, Tokyo

60

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

1,251

1,115

0.4

1,180

A

1,229

1,083

0.3

1,300

A

888

821

0.3

1,030

A

1,070

974

0.3

1,130

A

1,505

1,357

0.4

1,410

A

1,428

1,346

0.4

1,420

A

1,088

1,081

0.3

1,090

A

1,059

956

0.3

1,180

A

1,023

946

0.3

1,070

A

906

819

0.3

999

A

825

743

0.2

915

A

795

744

0.2

730

A

676

639

0.2

660

A

651

661

0.2

638

A

646

655

0.2

499

A

620

536

0.2

726

A

604

623

0.2

587

A

Property
number(Note 1)Name of property

A43

College Square Machida

A44

Belair Meguro

A45

Wacore Tsunashima I

A46

Foros Nakamurabashi

A47

Growth Maison Kaijin

A48

College Square Machiya

A51

City House Tokyo Shinbashi

A52

Winbell Kagurazaka

A53

Nishiwaseda Cresent Mansion

A54

Lexington Square Akebonobashi

A59

Towa City Coop Shinotsuka II

A61Bichsel Musashiseki

A63

Towa City Coop Sengencho

A64

Royal Park Omachi

A65

Lexington Square Haginomachi

A66

Visconti Kakuozan

A71

Lexington Square Daitabashi

A72

Lexington Square Honjo
Azumabashi

A73

AMS TOWER Minami 6-Jo

A75

Spacia Ebisu

A76

Neo Prominence

A77

Invoice Shin-Kobe Residence

BalanceAcquisition
sheet
price
Legal form
carrying(JPY
of assetvalue
million)(JPY(Note 3)
million)Location(Note 2)Trust
beneficiaryinterests(Note 7)Trust
beneficiary
1-2-15 Meguro, Meguro-ku, Tokyo
interests(Note 7)Trust
2-7-47 Tarumachi, Kohoku-ku,
beneficiaryinterests
Yokohama-shi, Kanagawa(Note 7)Trust
beneficiary
1-6-6 Kouyama, Nerima-ku, Tokyo
interests(Note 7)Trust
beneficiary
5-29-51 Kaijin, Funabashi-shi, Chibainterests(Note 7)Trust
beneficiary
7-3-1 Arakawa, Arakawa-ku, Tokyo
interests(Note 7)Trust
6-19-1 Shinbashi, Minato-ku, Tokyo beneficiaryinterests
Trust
6-15 Shin-Ogawacho, Shinjuku-ku,
beneficiaryTokyo
interests
Trust
3-18-9 Nishi-Waseda, Shinjuku-ku,
beneficiaryTokyo
interests
Trust
3-8 Yochomachi, Shinjuku-ku, Tokyo beneficiaryinterests
Trust
5-49-7 Higashi-Ikebukuro,
beneficiary
Toshima-ku, Tokyo
interests
Trust
1-22-7 Sekimachi-Kita, Nerima-ku,
beneficiaryTokyo
interests
Trust
4-338-2 Sengencho, Nishi-ku,
beneficiary
Yokohama-shi, Kanagawa
interests
Trust
2-11-10 Omachi, Aoba-ku,
beneficiary
Sendai-shi, Miyagi
interests
Trust
1-15-16 Haginomachi,
beneficiary
Miyagino-ku, Sendai-shi, Miyagi
interests
Trust
2-44 Otanacho, Chikusa-ku,
beneficiary
Nagoya-shi, Aichi
interests
Trust
1-33-18 Izumi, Suginami-ku, Tokyo beneficiaryinterests
Trust
4-20-6 Higashikomagata,beneficiary
Sumida-ku, Tokyo
interests
Trust
2-5-15 Minami 6-Jo Nishi,
beneficiary
Chuo-ku, Sapporo-shi, Hokkaido
interests
Trust
3-6-22 Higashi, Shibuya-ku, Tokyo beneficiaryinterests
Trust
3-21-5 Shimo, Kita-ku, Tokyo
beneficiaryinterests
Trust
3-3-8 Ikutacho Chuo-ku, Kobe-shi,
beneficiary
Hyogointerests
3-4-4 Nakamachi, Machida-shi,
Tokyo

61

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

589

558

0.2

535

A

589

557

0.2

607

A

572

525

0.2

515

A

566

518

0.2

570

A

557

515

0.2

476

A

510

453

0.1

548

A

2,520

2,316

0.7

3,260

B

3,260

3,040

0.9

4,030

C

1,880

1,880

0.5

2,540

C

1,450

1,322

0.4

1,860

D

866

821

0.2

1,080

B

577

554

0.2

719

C

1,110

1,013

0.3

1,350

B

415

390

0.1

560

B

330

282

0.1

446

B

255

230

0.1

273

D

977

852

0.3

1,200

D

511

436

0.1

624

D

1,180

960

0.3

1,270

D

7,010

6,487

2.0

8,060

B

1,660

1,613

0.5

1,980

B

1,260

1,172

0.4

1,430

B

Property
number(Note 1)Name of property

A78

Cosmo Court Motomachi

A79

Revest Honjin

A80

Revest Matsubara

A82

Alba Noritake Shinmachi

A83

Revest Meieki Minami

A84

Revest Heian

A85

Vendir Hamaotsu Ekimae

A86

Salvo Sala

A87

Excellente Kagurazaka

A88

Luna Court Edobori

A89

Winntage Kobe Motomachi

A90

Queen's Court Fukuzumi

A91

Corp Higashinotoin

A92

Belair Oimachi

A93

Siete Minami-Tsukaguchi

A94

Prime Life Sannomiya Isogami
Koen

A95

HERMITAGE NANBA WEST

A96

Century Park Shinkawa 1-bankan

A97

West Avenue

A98

Little River Honmachibashi

A99

Prime Life Mikage

A100 City Court Kitaichijo

A101 Lieto Court Mukojima

BalanceAcquisition
sheet
price
Legal form
carrying(JPY
of assetvalue
million)(JPY(Note 3)
million)Location(Note 2)Trust
beneficiaryinterests
Trust
2-13 Toriidori Nakamura-ku,
beneficiary
Nagoya-shi, Aichi
interests
Trust
3-13-12 Matsubara Naka-ku,
beneficiary
Nagoya-shi, Aichi
interests
Trust
3-6-8 Noritake Shinmachi, Nishi-ku,
beneficiary
Nagoya-shi, Aichi
interests
Trust
2-13-33 Meieki-Minami,
beneficiary
Nakamura-ku, Nagoya-shi, Aichi
interests
Trust
2-13-17 Heian, Kita-ku,
beneficiary
Nagoya-shi, Aichi
interests
Trust
1-2-15 Hamaotsu, Otsu-shi, Shiga
beneficiaryinterests
Trust
2-6-21 Shimanouchi Chuo-ku,
beneficiary
Osaka-shi, Osakainterests
Trust128-1 Yamabukicho Shinjuku-ku,
beneficiaryTokyo, and other one parcel
interests
Trust
3-4-11 Edobori, Nishi-ku,
beneficiary
Osaka-shi, Osakainterests
Trust
7-2-2 Motomachidori, Chuo-ku,
beneficiary
Kobe-shi, Hyogo
interests
Trust
1-3-10 Fukuzumi, Koto-ku, Tokyo
beneficiaryinterests
380-1 Kawaranomachi,
Trust
Higashinotoindori Nijo Kudaru,
beneficiary
Nakagyo-ku, Kyoto-shi, Kyoto, andinterests
other two parcels
Trust
5-14-17 Higashi-Oi, Shinagawa-ku,
beneficiaryTokyo
interests
Trust
3-18 Minami-Tsukaguchimachi,
beneficiary
Amagasaki-shi, Hyogo
interests
Trust
4-3-23 Isogamidori, Chuo-ku,
beneficiary
Kobe-shi, Hyogo
interests
Trust
4-10-3 Sakuragawa, Naniwa-ku,
beneficiary
Osaka-shi, Osakainterests
Trust
4-1-2 Shinkawacho, Minato-ku,
beneficiary
Nagoya-shi, Aichi
interests
Trust
1-5-17 Nishi, Kunitachi-shi, Tokyo beneficiaryinterests
Trust
1-34 Honmachibashi, Chuo-ku,
beneficiary
Osaka-shi, Osakainterests
Trust
2-25-11 Mikage Tsukamachi,
beneficiary
Higashinada-ku, Kobe-shi, Hyogo
interests
Trust
1-6-3 Kita 1-jo Higashi, Chuo-ku,
beneficiary
Sapporo-shi, Hokkaido
interests
Trust
5-45-10 Mukojima, Sumida-ku,
beneficiaryTokyo
interests
3-12-20 Motomachidori Chuo-ku,
Kobe-shi, Hyogo

62

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

973

898

0.3

1,090

B

674

620

0.2

813

B

657

609

0.2

797

B

608

560

0.2

733

B

597

550

0.2

715

B

595

549

0.2

694

B

581

529

0.2

738

B

544

504

0.2

648

B

543

513

0.2

635

B

525

487

0.1

570

B

512

470

0.1

609

B

456

433

0.1

604

B

446

418

0.1

516

B

412

392

0.1

511

B

374

351

0.1

449

B

373

348

0.1

438

B

355

332

0.1

433

B

335

321

0.1

425

B

331

313

0.1

313

B

310

292

0.1

398

B

297

276

0.1

337

B

1,782

1,791

0.5

1,950

B

1,683

1,705

0.5

1,730

B

Property
number(Note 1)

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

A102 Lieto Court Nishi-Ojima

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

A103 Royal Parks Momozaka

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

A104 Royal Parks Shinden

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

A105 Royal Parks Tower Minami-Senju

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

A106 Royal Parks Seasir Minami-Senju

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

Trust
beneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests

Subtotal (67 properties)

B14

Lexington Plaza Nishigotanda

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

B15

Cross Square NAKANO

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

B16

Ohki Aoba Building

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

B17

Lexington Plaza Hachiman

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

B18

AEON TOWN Sukagawa

105 Furukawa, Sukagawa-shi,
Fukushima

Trust
beneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests

Subtotal (5 properties)

D01

Hotel MyStays Kanda

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

D02

Hotel MyStays Asakusa

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

D03

Hotel MyStays Kyoto-Shijo

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

D04

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

Hotel MyStays Maihama

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

D06

Hotel MyStays Dojima(Note 8)2-4-1 Sonezakishinchi, Kita-ku,
Osaka

D07

Hotel MyStays Nagoya-Sakae

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

D08

Hotel MyStays
Sakaisuji-Honmachi

1-4-8 Awaji-machi, Chuo-ku,
Osaka-shi, 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
Fukuoka-Tenjin-Minami

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

D12

Flexstay Inn Iidabashi

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

63

Trust
beneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests

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

1,634

1,649

0.5

1,720

B

2,910

2,908

0.8

3,080

C

5,024

5,072

1.4

5,490

C

21,87922,645

6.2

22,700

B

2,683

2,787

0.8

2,720

B

93,01389,94926.3

102,353

-

4,880

4,639

1.4

4,250

B

1,060

1,125

0.3

1,170

B

816

709

0.2

710

D

3,280

3,072

0.9

3,690

C

2,320

1,885

0.7

2,410

C

12,356

11,432

3.5

12,230

-

2,851

3,022

0.8

5,020

B

2,584

2,569

0.7

4,970

B

6,024

5,757

1.7

15,100

B

4,930

4,701

1.4

7,140

B

4,870

4,666

1.4

6,580

B

3,845

3,663

1.1

7,340

B

2,958

2,751

0.8

5,950

B

2,514

2,431

0.7

7,750

B

2,119

2,017

0.6

3,500

B

1,898

1,830

0.5

3,100

B

1,570

1,518

0.4

5,060

B

1,381

1,371

0.4

2,020

B

Property
number(Note 1)

D13

D14

D15

D16

D17

D18

D19

D20

D21

D22

D23

D24

D25

D26

D27

D28

D29

D30

D31

D32

D33

D34

D35

D36

Name of property

BalanceAcquisition
sheet
price
Legal form
carrying(JPY
of assetvalue
million)(JPY(Note 3)
million)Location(Note 2)Trust
beneficiaryinterests
Trust
1-22-19 Kita-Shinagawa,Flexstay Inn Shinagawa
beneficiary
Shinagawa-ku, Tokyo
interests
Trust
1-52-5 Tokiwadai, Itabashi-ku,
Flexstay Inn Tokiwadai
beneficiaryTokyo
interests
Trust
Flexstay Inn Sugamo
3-6-16 Sugamo, Toshima-ku, Tokyo beneficiaryinterests
Trust
1-3-2 Tokuicho, Chuo-ku,
Hotel MyStays Otemae
beneficiary
Osaka-shi, Osakainterests
Trust
Flexstay Inn Kiyosumi Shirakawa 1-12-16 Tokiwa, Koto-ku, Tokyo
beneficiaryinterests
Trust
4-27-12 Futaba, Shinagawa-ku,
Flexstay Inn Nakanobu P1
beneficiaryTokyo
interests
Trust
4-27-8 Futaba, Shinagawa-ku,
Flexstay Inn Nakanobu P2
beneficiaryTokyo
interests
Trust
3-37-2 Sumiyoshicho, Naka-ku,
APA Hotel Yokohama-Kannai
beneficiary
Yokohama-shi, Kanagawa
interests
Trust
26-17 Honcho, Hakodate-shi,
Hotel Nets Hakodate (Note 9)
beneficiary
Hokkaido
interests
Trust
5-10-15 Shirokane, Minato-ku,
Flexstay Inn Shirogane
beneficiaryTokyo
interests
Trust
Hotel MyStays Haneda
5-1-13 Haneda, Ota-ku, Tokyo
beneficiaryinterests
Trust
Hotel MyStays Kameido P1
6-32-1 Kameido, Koto-ku, Tokyo
beneficiaryinterests
Trust
5-5-13 Higashi-Ueno, Taito-ku,
Hotel MyStays Ueno Iriyaguchi
beneficiaryTokyo
interests
Trust
Hotel MyStays Kameido P2
6-7-8 Kameido, Koto-ku, Tokyo
beneficiaryinterests
Trust
1-23 Masagocho, Shimizu-ku,
Hotel Vista Shimizu
beneficiary
Shizuoka-shi, Shizuoka
interests
Trust
Super Hotel Shinbashi/
5-16-4 Shinbashi, Minato-ku, Tokyo beneficiaryKarasumoriguchiinterests
Trust
Flexstay Inn Higashi-Jujo
2-10-2 Nakajujo, Kita-ku, Tokyo
beneficiaryinterests
Trust
2-4-1 Higashi-Shukugo,
Hotel MyStays Utsunomiya
beneficiary
Utsunomiya-shi, Tochigi
interests
Trust
1-13-2 Kaizuka, Kawasaki-ku,
Flexstay Inn Kawasaki-Kaizuka
beneficiary
Kawasaki-shi, Kanagawa
interests
Trust
1-3-2 Takara-machi, Toyama-shi,
Comfort Hotel Toyama
beneficiary
Toyamainterests
Trust
15-9 Ogawacho, Kawasaki-ku,
Flexstay Inn Kawasaki-Ogawacho
beneficiary
Kawasaki-shi, Kanagawa
interests
Trust
Flexstay Inn Ekoda
8-6 Sakaecho, Nerima-ku, Tokyo
beneficiaryinterests
Trust
Super Hotel Tokyo-JR Tachikawa 2-21-9 Akebonocho, Tachikawa-shi,
beneficiary
KitaguchiTokyointerests
Hotel MyStays Ueno Inaricho

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

64

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

1,331

1,270

0.4

2,350

B

1,242

1,215

0.4

2,040

B

1,242

1,220

0.4

2,210

B

1,192

1,143

0.3

2,140

B

1,192

1,158

0.3

4,700

B

749

732

0.2

1,300

B

589

574

0.2

810

B

283

288

0.1

390

B

8,350

7,971

2.4

9,650

B

2,792

2,655

0.8

3,790

B

2,119

2,104

0.6

2,310

B

7,801

7,527

2.2

8,320

B

5,594

5,486

1.6

7,020

B

3,821

3,744

1.1

4,130

B

3,742

3,671

1.1

4,750

B

2,198

2,103

0.6

2,450

B

1,624

1,608

0.5

1,790

B

1,277

1,269

0.4

1,390

B

1,237

1,232

0.3

1,430

B

980

945

0.3

1,180

B

979

948

0.3

1,090

B

906

889

0.3

1,050

B

5,069

4,969

1.4

4,880

B

1,170

1,139

0.3

1,230

E

Property
number(Note 1)

D37

D38

D39

D40

D41

D42

D43

D44

D45

D46

D47

D48

D49

D50

D51

D52

D53

－

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

Trustbeneficiaryinterests
Trust
1-9-30 Nishi-Shinsaibashi,
Hotel MyStays Shinsaibashi
beneficiary
Chuo-ku, Osaka-shi, Osakainterests
Trust
3-13-13 Kurosaki, Yahatanishi-ku,
Comfort Hotel Kurosaki
beneficiary
Kitakyusyu-shi, Fukuoka
interests
Trust
2-18-14 Omotecho, Maebashi-shi,
Comfort Hotel Maebashi
beneficiary
Gunmainterests
Trust
Comfort Hotel Tsubame-Sanjo
2-115 Sugoro, Sanjo-shi, Niigata
beneficiaryinterests
Trust
3-4 Ohdori-Nishi, Kitami-shi,
Comfort Hotel Kitami
beneficiary
Hokkaido
interests
Trust
Hotel MyStays Gotanda Station
2-6-8 Nishi-Gotanda,
beneficiary(Note 10)
Shinagawa-ku, Tokyo
interests
1-10 Kaidoue (and 59 other land
Trust
Hotel Epinard Nasu
parcels), Oaza-Takakuhei,
beneficiaryNasu-machi, Nasu-gun, Tochigi
interests
Trust
3-5-7 Tenjin, Chuo-ku, Fukuoka-shi,
Hotel MyStays Fukuoka Tenjin
beneficiary
Fukuokainterests
Trust
1-18-14 Hamamatsucho, Minato-ku,
Hotel MyStays Hamamatsucho
beneficiaryTokyo
interests
Trust
2-13-1 Hirooka, Kanazawa-shi,
Hotel MyStays Premier Kanazawa
beneficiary
Ishikawa
interests
Trust
9-9 Hyogomachi, Takamatsu-shi,
Takamatsu Tokyu REI Hotelbeneficiary
Kagawainterests
Trust
Hotel MyStays Premier
1-8-5 Hamamatsucho, Minato-ku,
beneficiary
HamamatsuchoTokyo
interests
Trust
Hotel MyStays Shin Osaka
6-2-19 Nishinakashima,
beneficiary
Conference Center
Yodogawa-ku, Osaka-shi, Osakainterests
Trust
6-19-3 Minami Oi, Shinagawa-ku,
Hotel MyStays Premier Omori
beneficiaryTokyo
interests
Trust
Beppu Kamenoi Hotel
5-17 Chuo Cho, Beppu-shi, Oita
beneficiaryinterests
Trust
4-15 Kita Hachijyo Nishi, Nita-ku,
Hotel MyStays Sapporo Station
beneficiary
Sapporo-shi, Hokkaido
interests
Super Hotel JR Ueno-iriyaguchi

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

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

1,130

1,108

0.3

1,220

E

3,160

3,109

0.9

3,410

B

1,148

1,110

0.3

1,220

E

1,128

1,101

0.3

1,170

E

1,010

985

0.3

1,070

E

851

822

0.2

904

E

26,52326,493

7.5

27,400C

20,981

20,476

5.9

22,400

C

8,059

7,953

2.3

8,450

C

7,959

7,892

2.3

7,760

C

13,761

13,4503.9

14,200

C

2,139

2,116

0.6

2,210

E

8,000

8,000

2.3

8,080

B

13,06813,066

3.7

13,200

D

9,781

9,777

2.8

9,880

D

8,870

8,818

2.5

8,960

D

7,880

7,867

2.2

7,960

D

Subtotal (53 properties)

230,480

226,32865.2

285,424-

Total (125 properties)

335,849

327,70995.0

400,007-

17,845

17,8545.0--

Subtotal of preferred equity interest issued by special purpose company (1 property)

17,845

17,854

5.0--

Total (126 properties)

353,695

345,564

100.0

-

-

Sheraton Grande Tokyo Bay
Hotel (preferred equity
interest)

Preferredequity interest
issued by
specialpurposecompany(Note 11)－65

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

(Note 2)

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

(Note 3)

“Acquisition price” is the purchase price indicated in the real estate or trust beneficiary purchase agreement. (However, for Sheraton GrandeTokyo Bay Hotel (preferred equity interest) described below (Note 11), “Acquisition price” indicates the amount invested by INV for the
preferred equity interest. The same shall apply hereinafter in this document.) Such price excludes consumption tax and other taxes, and has
been rounded down to the nearest million yen.

(Note 4)

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

(Note 5)

“Appraisal value at the end of the period” is the value appraised or determined based on research by the real estate appraiser as of the end of
the fiscal period in accordance with the Articles of Incorporation of INV and the regulations of The Investment Trust Association, Japan.
For Sheraton Grande Tokyo Bay Hotel (preferred equity interest), there is no Appraisal value at the end of the period due to it being preferred
equity interest.

(Note 6)

“Appraiser” is shown in code in the table above. The code used to represent the appraisers is as follows:
Appraiser
A: Assets Research and Development Inc.
B: Japan Real Estate Institute
C: Morii Appraisal & Investment Consulting Inc.
D: The Tanizawa Sogo Appraisal Co., Ltd.
E: Daiwa Real Estate Appraisal Co., Ltd.

(Note 7) These trust beneficiary interests were integrated into three groups with other trust beneficiary interests when INV procured funds throughdebt financing backed by trust assets in July 2011. The grouping of trust beneficiary interests at the end of the fiscal period ended December
31, 2017 is as follows:
Group 1
Nisshin Palacestage Daitabashi, Nisshin Palacestage Higashi-Nagasaki, Growth Maison Shin-Yokohama, Belle Face Ueno-Okachimachi,
Growth Maison Yoga, Shibuya-Honmachi Mansion, City Heights Kinuta, and Foros Nakamurabashi
Group 2Growth Maison Gotanda, Growth Maison Kameido, Emerald House, Route Tachikawa, College Square Machida, Belair Meguro, andWacore Tsunashima I
Group 3
Suncrest Shakujii-Koen, Grand Rire Kameido, Acseeds Tower Kawaguchi-Namiki, Growth Maison Kaijin, and College Square Machiya(Note 8)With change of the operator, the property name was changed to Hotel MyStays Dojima on August 1, 2017. The same shall apply hereinafter inthis document.

(Note 9)With change of the operator, the property name is scheduled to be changed to Hotel MyStays Hakodate-Goryokaku on May 1, 2018.

(Note 10) On October 31, 2017, INV acquired the exclusive area for which floor conversion work was implemented (the “Floor Expansion Portion”) as
an addition to the exclusive area of the property INV had owned (the “Owned Portion”). INV operates the Owned Portion and the Floor
Expansion Portion as one, and thus acquisition price and other figures indicate the total of the Owned Portion and the Floor Expansion
Portion unless otherwise specified. The same shall apply hereinafter in this document. Appraisal value at the end of the period indicatesappraisal value calculated deeming the Owned Portion and the Floor Expansion Portion as one.
(Note 11) Preferred equity interest issued by special purpose company refers to 178,458 units of preferred equity interest issued by Kingdom Special
Purpose Company (equivalent to 49.0% of preferred equity interest issued and outstanding after the issuance of the said preferred equity
interest), with the Sheraton Grande Tokyo Bay Hotel as an underlying asset, and is recorded as 1 property.

66bCapital expenditures for assets under management(a) Schedule for capital expenditures
The schedule for the principal capital expenditures for property maintenance construction, etc., as of the end of the
fiscal period ended December 31, 2017 for the real estate assets is as follows.
Estimated Cost (JPY thousand)

Total

Payment for
the Fiscal
Advance
Period ended
Payments
December31, 2017

From January 2018
To June 2018260,700--

Renovation work

From January 2018
To June 2018258,700--

Urayasu-shi,
Chiba

Renovation work

From January 2018
To June 2018

243,500--

MyStays
D04 Shin-Urayasu
Conference Center

Urayasu-shi,
Chiba

Renovation work

From January 2018
To June 201880,300--

D44 Hotel Epinard Nasu

Nasu-gun,Tochigi

Renovation work

From January 2018
To June 2018

30,000--PurposeScheduled Time of
Implementation

Osaka-shi,
Osaka

Renovation work

Hotel MyStays
Kyoto-Shijo

Kyoto-shi,
Kyoto

Hotel MyStays
MaihamaName of Property

Location

D06

Hotel MyStays
Dojima

D03
D05(b) Capital expenditures for the fiscal period ended December 31, 2017
The principal construction work constituting capital expenditures for the real estate assets for the fiscal period ended
December 31, 2017 is as follows. Capital expenditures for the fiscal period totaled JPY 599,771 thousand, andtogether with JPY 21,7617 thousand in repair costs included in this fiscal period’s expenses, construction work
totaling JPY 621,539 thousand was implemented.
Name of property

Location

PurposeTime ofimplementation

Payment(JPY thousand)

D44 Hotel Epinard Nasu

Nasu-gun,Tochigi

Renovation work

From July 2017
To December 201735,854

Hotel MyStays
Nagoya-Sakae

Nagoya-shi,
Aichi

Boiler equipment replacement

From July 2017
To December 2017

28,900D35 Flexstay Inn Ekoda

Nerima-ku,
Tokyo

Conversion of guestrooms to
non-smoking

From July 2017
To December 201725,482

D27

Hotel MyStays
Kameido P2

Koto-ku,Tokyo

Conversion of guestrooms to
non-smoking

From July 2017
To December 2017

25,078D25

Hotel MyStays
Kameido P1

Koto-ku,Tokyo

Conversion of guestrooms to
non-smoking

From July 2017
To December 201716,346

D07

Other construction

468,109
Total

599,77167

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

Fiscal period

Reserved funds at beginningof period
Amount reserved(Note)
Amount reversed(Note)
Amount carried over for
next fiscal period(Note)(Unit: JPY thousand)
25th
26th
27th
28th
29th
fiscal period
fiscal period
fiscal period
fiscal period
fiscal period
From July 1, 2015 From January 1, From July 1, 2016 From January 1, From July 1, 2017
to December 31, 2016 to June 30, to December 31, 2017 to June 30, to December 31,
2017
2017
2016
2016
2015
852,699

982,750

1,303,685

1,397,286

1,397,243

352,490543,275

446,066

468,145

697,444

222,439

222,339

352,464

468,189

528,579

982,750

1,303,685

1,397,286

1,397,243

1,566,108

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

68c

Condition of income, etc. (from July 1, 2017 to December 31, 2017)(Unit: JPY thousand)

Property
No.

Property Name

Total ofrentalrevenue(i)Rent,commonarea fees

Total ofrentalFacility
relatedTaxes andexpenses management public dues
fee
(ii)

Other
incomeInsurance
expenses

Depreciation
expenses
(iii)

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

A26

Nisshin Palacestage Daitabashi

37,93535,043

2,892

18,821

5,249

1,624

44

9,303

2,599

19,11328,417

A27

Nisshin Palacestage
Higashi-Nagasaki

44,93640,3184,617

26,303

7,040

2,669

68

13,7572,767

18,63232,390A28

Growth Maison Gotanda

27,42926,844

585

8,447

2,118

1,322

27

4,457

521

18,981

23,438A29

Growth Maison Kameido

34,00631,322

2,684

14,795

4,256

1,678

38

5,994

2,828

19,211

25,205

A30

Emerald House

42,56939,737

2,832

17,538

4,997

2,547

71

9,263

658

25,03034,294

A31

Harmonie Ochanomizu

40,32738,406

1,921

16,501

3,774

1,899

40

7,755

3,031

23,82531,581

A32

Suncrest Shakujii-Koen

36,14633,582

2,564

17,782

4,334

3,125

65

8,884

1,372

18,36427,249A33

Growth Maison Shin-Yokohama

33,51831,3992,118

16,349

4,177

2,402

48

6,237

3,483

17,16823,406

A34

Belle Face Ueno-Okachimachi

29,34728,266

1,081

13,487

5,828

1,656

35

5,368

598

15,86021,228A35Grand Rire Kameido

26,61926,619

8,053

276

1,722

39

5,510

504

18,566

24,076A36

Growth Maison Ikebukuro

25,91324,142

1,770

11,504

3,444

1,045

26

5,356

1,631

14,40919,766A37

Growth Maison Yoga

22,004

20,5791,424

10,595

3,061

1,367

26

4,196

1,943

11,40815,605

A38

Route Tachikawa

20,357

18,549

1,808

9,034

1,765

1,068

28

4,426

1,745

11,32315,750

A39

Shibuya-Honmachi Mansion

19,61018,671

938

6,078

1,980

929

23

1,954

1,190

13,532

15,487

A40City Heights Kinuta

16,49915,359

1,140

8,555

3,002

979

21

2,066

2,484

7,944

10,011

A41

Acseeds Tower Kawaguchi-Namiki

24,68024,079600

10,873

2,865

1,120

29

5,069

1,788

13,806

18,875

A42

Capital Heights Kagurazaka

19,656

18,859

796

7,751

2,425

1,087

25

2,716

1,495

11,904

14,621

A43

College Square Machida

17,484

17,484

4,190

244

1,517

25

1,903

500

13,293

15,197

A44

Belair Meguro15,462

14,696

765

7,325

2,057

875

17

2,382

1,993

8,136

10,518A45

Wacore Tsunashima I

17,87917,339

539

8,063

2,279

880

23

4,006

872

9,816

13,823

A46

Foros Nakamurabashi

18,73016,746

1,983

9,543

2,347

985

22

5,037

1,150

9,187

14,224A47

Growth Maison Kaijin

23,51020,9792,531

14,066

4,017

2,090

54

6,514

1,388

9,444

15,958

A48

College Square Machiya

14,706

14,706

5,250

228

930

18

3,568

504

9,455

13,024

A51

City House Tokyo Shinbashi

91,86986,426

5,443

37,97913,5494,949

84

13,331

6,063

53,89067,222

A52

Winbell Kagurazaka

106,463

97,3009,163

37,608

9,265

6,369

149

16,891

4,932

68,85485,745

A53

Nishiwaseda Cresent Mansion

73,03470,245

2,788

21,152

6,297

3,639

104

8,780

2,330

51,881

60,662

A54

Lexington Square Akebonobashi

50,04447,2582,786

19,151

4,754

2,217

42

8,814

3,321

30,89339,708

A56

Casa Eremitaggio (Note 2)

32,72529,285

3,439

15,911

3,337

2,423

32

7,738

2,378

16,81424,552

A59

Towa City Coop Shinotsuka II

35,01133,6891,321

14,405

4,675

1,398

38

5,551

2,740

20,60626,157

-

-

-

A61

Bichsel Musashiseki

23,55722,939

617

8,560

2,770

1,179

33

3,194

1,382

14,99618,191

A62

Lexel Mansion Ueno Matsugaya(Note 2)

33,79530,3943,400

16,856

3,641

2,755

41

7,156

3,261

16,93824,095

A63

Towa City Coop Sengencho

54,09550,044

4,051

27,214

14,049

2,997

74

7,510

2,581

26,88034,391

A64

Royal Park Omachi

26,79023,314

3,476

13,045

4,968

1,591

43

4,834

1,608

13,745

18,579

A65

Lexington Square Haginomachi

16,671

15,096

1,575

9,238

2,669

1,142

27

3,553

1,845

7,433

10,986

A66

Visconti Kakuozan

10,327

9,419

907

6,235

2,510

897

15

1,733

1,077

4,092

5,825

A71

Lexington Square Daitabashi

31,87330,871

1,001

14,928

2,573

1,545

30

8,056

2,721

16,94525,001

A72

Lexington Square Honjo
Azumabashi

18,10817,192916

10,378

2,311

817

21

5,037

2,190

7,729

12,767

A73

AMS TOWER Minami 6-Jo

42,88840,2272,660

31,738

6,357

6,425

86

14,1994,669

11,14925,349

A75

Spacia Ebisu

208,979

185,537

23,441

72,953

13,3598,827

170

38,185

12,409136,026

174,212

A76

Neo Prominence

64,93555,857

9,077

25,576

8,845

3,547

109

10,2592,814

39,35849,618

A77

Invoice Shin-Kobe Residence

49,88946,046

3,842

26,592

4,476

2,700

63

11,526

7,825

23,29634,822

A78

Cosmo Court Motomachi

37,73237,061670

20,847

3,495

2,305

64

9,989

4,993

16,884

26,873

A79

Revest Honjin

29,712

27,833

1,879

14,011

3,460

1,802

47

7,464

1,237

15,70023,165

A80

Revest Matsubara

28,38826,596

1,792

14,271

3,733

1,868

43

7,072

1,552

14,117

21,189A81

Sun Terrace Minami Ikebukuro(Note 2)

22,533

20,436

2,097

12,029

2,967

1,378

26

4,351

3,304

10,504

14,855

A82

Alba Noritake Shinmachi

25,132

23,525

1,606

12,942

2,910

1,735

44

6,960

1,292

12,18919,150

A83

Revest Meieki Minami

24,97923,232

1,747

13,600

3,317

1,664

44

6,982

1,592

11,37918,361

A84

Revest Heian

23,65623,121534

10,870

2,347

1,400

32

6,423

666

12,786

19,209A85

Vendir Hamaotsu Ekimae

33,27931,0552,224

15,578

5,271

1,961

60

7,037

1,249

17,70024,737

A86

Salvo Sala

25,62024,426

1,193

11,381

2,975

1,548

37

5,444

1,376

14,238

19,682

A87

Excellente Kagurazaka

17,974

17,652

322

8,204

1,989

767

23

4,204

1,219

9,770

13,974

A88

Luna Court Edobori

20,76820,015753

10,660

2,903

1,186

31

5,081

1,456

10,10815,190A89

Winntage Kobe Motomachi

20,88020,684196

12,813

2,975

1,587

38

5,836

2,375

8,067

13,903

A90

Queen's Court Fukuzumi

17,20016,361

839

6,506

1,606

747

22

3,210

920

10,693

13,90469

Property
No.

Property Name

Total ofrentalrevenue(i)Rent,commonarea fees

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

Insurance
expenses

Depreciation
expenses
(iii)

Other
expensesProfit andLoss((i)-(ii))NOI((i)-(ii)+(iii))
14,748

A91

Corp Higashinotoin

19,847

17,239

2,608

8,901

2,469

922

28

3,802

1,679

10,945

A92

Belair Oimachi

14,697

14,113

583

6,533

2,058

672

18

2,675

1,108

8,163

10,839A93

Siete Minami-Tsukaguchi

16,625

15,470

1,155

7,619

2,108

982

27

3,244

1,256

9,006

12,251

A94

Prime Life Sannomiya Isogami
Koen

15,321

14,354

966

8,974

1,963

847

20

3,428

2,714

6,346

9,775

A95

HERMITAGE NANBA WEST

15,767

15,599

168

7,333

1,710

1,003

24

3,446

1,148

8,434

11,881

A96

Century Park Shinkawa 1-bankan

17,01814,170

2,847

8,828

2,396

873

32

4,190

1,334

8,189

12,379

A97

West Avenue

10,715

10,305

409

6,462

1,663

565

17

3,125

1,089

4,252

7,378

A98

Little River Honmachibashi

12,838

12,690

147

7,429

2,284

950

22

2,874

1,298

5,408

8,282

A99

Prime Life Mikage

12,20911,958

250

6,557

1,427

762

18

2,971

1,378

5,651

8,622

A100

City Court Kitaichijo

66,20061,3204,880

38,697

5,951

7,717

128

22,602

2,297

27,50250,105

A101

Lieto Court Mukojima

54,091

51,317

2,773

26,415

6,606

2,502

70

15,422

1,812

27,67643,098

A102

Lieto Court Nishi-Ojima

48,29847,825472

19,905

4,695

2,168

55

12,276710

28,392

40,669A103

Royal Parks Momozaka

148,512

134,870

13,641

111,218

51,2787,796

195

45,2006,748

37,29382,493

A104

Royal Parks Shinden

215,752

200,266

15,485

116,362

30,902

14,173386

70,469430

99,390169,859

A105

Royal Parks Tower Minami-Senju

744,215

686,817

57,398442,349

112,417-993

308,023

20,915

301,865

609,889

A106

Royal Parks Seasir Minami-Senju

96,18689,442

6,743

58,06915,935-256

40,282

1,594

38,11678,399B08

Kindai Kagakusha Building (Note
2)

6,827

5,626

1,200

5,470

1,227

10

-

1,283

1,356

1,356

B09

Shinjuku Island (Note 2)

B14

Lexington Plaza Nishigotanda

152,362

133,985

18,376

66,94027,042

12,210140

26,618928

85,422

112,040

B15

Cross Square NAKANO

46,566

39,594

6,971

17,742

6,444

3,862

59

5,065

2,309

28,82433,890

B16

Ohki Aoba Building

35,31827,817

7,501

21,016

9,273

4,056

73

6,861

750

14,302

21,164

B17

Lexington Plaza Hachiman

165,805

131,885

33,92079,96846,045

11,263

152

21,558948

85,837

107,396

B18

AEON TOWN Sukagawa

141,886

141,886-

93,71656,124

7,334

203

29,438615

48,16977,608

C01

Times Kanda-Sudacho 4th (Note 2)

435

435

-

384

-

384

D01

Hotel MyStays Kanda

111,117

111,117-

29,150

-

4,998

D02

Hotel MyStays Asakusa

106,946

106,946-

20,879-

D03

Hotel MyStays Kyoto-Shijo

315,937

315,937-

61,117-

D04

MyStays Shin-Urayasu ConferenceCenter187,712

187,712-51,272

-

8,161

2,948
(Note 1)

-

-

-

76

16,428518

86,066

226

50,011

515

254,820304,831138

42,462

509

136,440

178,902

160,018

160,018
231,470

D07

Hotel MyStays Nagoya-Sakae

220,601

220,601

D08

Hotel MyStays Sakaisuji-Honmachi

176,288

176,288

D09

Hotel MyStays Yokohama

127,889

127,889-

29,864

D10

Hotel MyStays Nippori

61,152

61,09260

16,590

D11

Hotel MyStays
Fukuoka-Tenjin-Minami

167,915

167,915-

20,005

D12

Flexstay Inn Iidabashi

52,682

52,682-

14,755

D13

Hotel MyStays Ueno Inaricho

50,46250,462-

13,115

D14

Flexstay Inn Shinagawa

42,95542,955

-

8,308

D15

Flexstay Inn Tokiwadai

53,86153,861-

11,270

D16

Flexstay Inn Sugamo

49,65449,654-

13,442-

D17

Hotel MyStays Otemae

127,898

127,898-

13,239

-

3,600

84

D18

Flexstay Inn Kiyosumi Shirakawa

36,93336,933-

11,463

-

3,386

53

D19

Flexstay Inn Nakanobu P1

17,374

17,374

-

5,112

-

951

17

3,637

69,921

17,16327,892

102,495

3,855

231,470-

105,549

10,364

Hotel MyStays Maihama-

51

81,967507

Hotel MyStays Dojima

8,208

51

23,582

D06

58,855

-

62

D05

-

39,824

-

3,192

72

36,046

512

120,194

156,240

11,618190

37,305

1,532

172,615

209,921

4,583

166

47,500508

150,679

198,180

6,399

86

20,900505

148,395

169,296

-

4,477

135

24,739512

98,025

122,765

-

1,756

42

14,286505

44,562

58,848

-

5,079

73

14,348504

147,909

162,257

-

4,498

61

9,688

506

37,926

47,615

-

1,470

31

11,107505

37,34648,454

-

1,660

26

6,116

505

34,64740,763

-

3,416

56

7,292

504

42,59149,8832,867

46

10,022506

36,212

46,234

9,047

506

114,659

123,707

7,516

506

25,47032,986505

12,261

15,899-D20

Flexstay Inn Nakanobu P2

10,19910,199

-

2,860

-

526

10

1,817

505

7,338

9,156

D21

APA Hotel Yokohama-Kannai

229,958

229,958-

88,632-

11,794

212

76,121

504

141,326

217,448

D22

Hotel Nets Hakodate

148,450

148,450-

47,871-

15,501

134

31,727

508

100,579

132,306

D23

Flexstay Inn Shirogane

50,78850,788

-

9,983

-

1,903

38

7,534

506

40,80548,339D24

Hotel MyStays Haneda

187,483

187,483

67,929

-

8,076

155

59,288409

119,553

178,842

D25

Hotel MyStays Kameido P1

180,675

180,675-

40,561

-

6,373

128

33,652406

140,114173,766

D26

Hotel MyStays Ueno Iriyaguchi

92,202

92,202-

24,8281,224

61

20,679407

67,37488,054

D27

Hotel MyStays Kameido P2

123,808

123,808-

30,5753,827

80

26,260407

93,233

119,493

D28

Hotel Vista Shimizu

82,14082,140-26,648

480

4,100

69

21,595404

55,491

77,086

D29Super Hotel
Shinbashi/ Karasumoriguchi

39,42639,426

-

8,959

706

3,097

29

4,717

407

30,46735,185

D30

Flexstay Inn Higashi-Jujo

37,74737,747

-

8,186

-

1,940

36

5,804

404

29,56035,365

D31

Hotel MyStays Utsunomiya

95,975

95,975-32,719-13,735239

18,330414

63,256

81,587

D32

Flexstay Inn Kawasaki-Kaizuka

32,833

32,833-

11,878

823

29

9,729

407

20,95430,684

-

70

2,455
-

889

Property
No.

Property Name

Total ofrentalrevenue(i)Rent,commonarea fees

Total ofrentalFacility
relatedTaxes andexpenses management public dues
fee
(ii)

Other
incomeInsurance
expenses

Depreciation
expenses
(iii)

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

D33

Comfort Hotel Toyama

35,92835,928-13,153

-

3,770

60

8,913

409

22,774

31,687

D34

Flexstay Inn Kawasaki-Ogawacho

29,40929,409

-

7,199

-

967

20

5,806

404

22,21028,017

D35

Flexstay Inn Ekoda

104,046

104,046-

37,748

-

4,663

83

32,596406

66,297

98,893

D36

Super Hotel Tokyo-JR Tachikawa
Kitaguchi

31,787

31,787-

13,120

1,391

2,798

39

8,482

408

18,66627,149

D37Super Hotel JR Ueno-iriyaguchi

27,27527,275

-

9,993

1,070

2,140

27

6,346

408

17,282

23,628

D38

Hotel MyStays Shinsaibashi

88,88088,880-22,1492,544

44

19,155404

66,731

85,887

D39

Comfort Hotel Kurosaki

37,89437,894-

18,132

650

3,418

54

13,600409

19,76133,362

D40

Comfort Hotel Maebashi

43,811

43,811-

29,534

5,719

5,029

76

18,294414

14,27632,570

D41

Comfort Hotel Tsubame-Sanjo

34,94932,861

15,420

570

3,836

66

10,534413

19,52830,063

D42

Comfort Hotel Kitami

30,30030,300-17,575

659

4,917

53

11,534410

12,72524,25958,3604,254

15,378342

37,942

442

368,686

406,629-

367,377

9,335

28,295852

328,458434

735,849

1,064,307
229,821

D43

Hotel MyStays Gotanda Station

D44

Hotel Epinard Nasu

D45

Hotel MyStays Fukuoka Tenjin

237,370

237,370-

50,052

-

7,036

105

42,503

406

187,318

D46

Hotel MyStays Hamamatsucho

114,084

114,084-

34,972

-

6,611

53

27,902405

79,112

107,015

D47

Hotel MyStays Premier Kanazawa

368,625

368,625-

125,407-

13,231

251

111,520404

243,217354,738

D48

Takamatsu Tokyu REI Hotel

D49
D50

Hotel MyStays Premier
Hamamatsucho
Hotel MyStays Shin Osaka
Conference Center

427,047
1,103,226

426,068

2,088

978

-

1,103,226

106,156

76,20029,956

60,11934,8788,681

148

15,472938

46,036

61,509228,976

228,857

118

22,998--168

22,420409

205,978

228,398
267,568

267,910

267,910-

15,177--165

14,835

176

252,732

D51

Hotel MyStays Premier Omori

160,256

160,223

32

17,102

18-

128

16,778176

143,153

159,932

D52

Beppu Kamenoi Hotel

221,531221,531-

64,216-

9

268

63,762

176

157,314221,077

D53

Hotel MyStays Sapporo Station
Total(Note 1)
(Note 2)

108,954

108,954-

24,434-

11,403,236

11,060,128

343,1073,962,183

707,458

470,600

91

24,168174

84,520108,688

11,4992,567,215

205,408

7,441,052

10,008,268

Not disclosed because the consent of the tenant was not obtained.
INV sold Kindai Kagaku Sha Building and Times Kanda-Sudacho 4th on July 31, 2017; Shinjuku Island on December 26, 2017; andCasa Eremitaggio, Lexel Mansion Ueno Matsugaya and Sun Terrace Minami Ikebukuro on December 28, 2017.

71

(3)

Tenant SummaryaSummary of lease conditions by property(As of December 31, 2017)
Rental revenue(JPY thousand)(Note7)

Ratio ofrentalrevenue(%)(Note 17)

Best Property Corporation

37,935

0.3

Pass throughmaster lease1

Best Property Corporation

44,936

0.4

Pass throughmaster lease48

1

Pacific Development &Management Co., Ltd

27,4290.2

Pass throughmaster lease

66

62

1

Mitsui Home Estate Co., Ltd.

34,006

0.3

Pass throughmaster lease

2,084.15

96

93

1

Tokyo Gakusei-life Co., Ltd.

42,5690.4

Pass throughmaster lease

1,748.24

1,702.08

65

64

1

Pacific Development &Management Co., Ltd.

40,327

0.4

Pass throughmaster lease

Suncrest Shakujii-Koen

3,029.16

3,029.16

29

29

1

Mitsui Home Estate Co., Ltd.

36,146

0.3

Pass throughmaster lease

A33

Growth Maison Shin-Yokohama

1,858.44

1,774.64

68

65

1

Pacific Development &Management Co., Ltd

33,5180.3

Pass throughmaster lease

A34

Belle Face Ueno-Okachimachi

1,351.11

1,182.08

64

56

1

Tokyo Gakusei-life Co., Ltd.

29,347

0.3

Pass throughmaster lease

A35

Grand Rire Kameido

1,562.26

1,562.26

72

72

1

J.S.B. Co., Ltd.

26,6190.2

Guaranteed
rent

A36

Growth Maison Ikebukuro

952.89930.4942

41

1

Pacific Development &Management Co., Ltd

25,913

0.2

Pass throughmaster lease

A37

Growth Maison Yoga

1,015.34

989.41

39

38

1Mitsui Home Estate Co., Ltd.

22,004

0.2

Pass throughmaster lease

A38

Route Tachikawa

1,368.57

1,368.57

24

24

1

Pacific Development &Management Co., Ltd

20,357

0.2

Pass throughmaster lease

A39

Shibuya-Honmachi Mansion

1,167.50

1,065.72

25

23

1

Pacific Development &Management Co., Ltd

19,610

0.2

Pass throughmaster lease

A40

City Heights Kinuta

1,235.93

1,169.33

19

18

1

Mitsui Home Estate Co., Ltd.

16,4990.1

Pass throughmaster lease

A41

Acseeds Tower
Kawaguchi-Namiki

1,210.74

1,168.46

57

55

1

Goodworks Co., Ltd.

24,680

0.2

Pass throughmaster lease

A42

Capital Heights Kagurazaka

1,126.65

1,095.18

26

25

1

Mitsui Home Estate Co., Ltd.

19,656

0.2

Pass throughmaster lease

A43

College Square Machida

1,047.75

1,047.75

62

62

1

Mainichicomnet Co., Ltd.

17,484

0.2

Guaranteed
rent

A44

Belair Meguro

557.05513.03

25

23

1

Pacific Development &Management Co., Ltd

15,462

0.1

Pass throughmaster lease

A45

Wacore Tsunashima I

907.46853.61

50

47

1

Pacific Development &Management Co., Ltd

17,8790.2

Pass throughmaster lease

A46

Foros Nakamurabashi

815.77795.5837

36

1

Mitsui Home Estate Co., Ltd.

18,730

0.2

Pass throughmaster lease

A47

Growth Maison Kaijin

2,040.27

1,973.84

34

33

1

Mitsui Home Estate Co., Ltd.

23,510

0.2

Pass throughmaster lease

A48

College Square Machiya

871.35871.354343

1

Mainichicomnet Co., Ltd.

14,706

0.1

Guaranteed
rent

A51

City House Tokyo Shinbashi

3,364.00

3,246.48

86

83

1

Mitsui Home Estate Co., Ltd.

91,8690.8

Pass throughmaster lease

A52

Winbell Kagurazaka

4,032.70

3,947.05

118

115

1

Mitsui Home Estate Co., Ltd.

106,463

0.9

Pass throughmaster lease

A53

Nishiwaseda Cresent Mansion

4,310.77

4,259.47

69

68

1

Pacific Development &Management Co., Ltd

73,034

0.6

Pass throughmaster lease

A54

Lexington Square Akebonobashi

1,987.88

1,918.95

88

85

1

Mitsui Home Estate Co., Ltd.

50,044

0.4

Pass throughmaster lease

A59

Towa City Coop Shinotsuka II

1,627.13

1,607.75

58

57

1

Mitsui Home Estate Co., Ltd.

35,011

0.3

Pass throughmaster lease

A61

Bichsel Musashiseki

1,220.24

1,151.99

70

66

1

Mitsui Home Estate Co., Ltd.

23,557

0.2

Pass throughmaster lease

A63

Towa City Coop Sengencho

3,426.36

2,884.56

154

129

1

Pacific Development &Management Co., Ltd

54,095

0.5

Pass throughmaster lease

A64

Royal Park Omachi

1,929.59

1,823.47

51

48

1

Goodworks Co., Ltd.

26,790

0.2

Pass throughmaster lease

A65

Lexington Square Haginomachi

1,528.58

1,448.48

39

37

1

Goodworks Co., Ltd.

16,671

0.1

Pass throughmaster lease

A66

Visconti Kakuozan

705.75591.498

71

Mitsui Home Estate Co., Ltd.

10,327

0.1

Pass throughmaster lease

A71

Lexington Square Daitabashi

1,430.64

1,430.64

43

43

1

Goodworks Co., Ltd.

31,873

0.3

Pass throughmaster lease

A72

Lexington Square Honjo
Azumabashi

784.74761.5033

32

1Mitsui Home Estate Co., Ltd.

18,1080.2

Pass throughmaster lease

A73

AMS TOWER Minami 6-Jo

4,460.56

3,620.74

120

97

1

Big Service Co., Ltd.

42,888

0.4

Pass throughmaster lease

A75

Spacia Ebisu

7,794.91

7,110.97

109

100

1

Pacific Development &Management Co., Ltd

208,979

1.8

Pass throughmaster lease

Leasable area2(m )(Note 1)

Leased area2(m )(Note 2)

Leasableunits(units)(Note 3)Nisshin Palacestage Daitabashi

1,771.13

1,645.50

98

91

1

A27

Nisshin Palacestage HigashiNagasaki

2,681.94

2,607.30

60

58

A28

Growth Maison Gotanda

1,051.50

1,051.50

48

A29

Growth Maison Kameido

1,367.96

1,286.12

A30

Emerald House

2,152.31

A31

Harmonie Ochanomizu

A32

Property
No.

Property name

A26

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

72

Tenants (Note 6)

Type oflease(Note 8)

Property
No.

Property nameLeasable area2(m )(Note 1)

Leased area2(m )(Note 2)

Leasableunits(units)(Note 3)

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

Tenants (Note 6)

Rental revenue(JPY thousand)(Note7)

Ratio ofrentalrevenue(%)(Note 17)

Type oflease(Note 8)A76

Neo Prominence

3,574.70

3,574.70

52

52

1

Goodworks Co., Ltd.

64,935

0.6

Pass throughmaster lease

A77

Invoice Shin-Kobe Residence

2,773.71

2,773.71

81

81

1

Goodworks Co., Ltd.

49,8890.4

Pass throughmaster lease

A78

Cosmo Court Motomachi

2,310.49

2,281.50

82

81

1

Goodworks Co., Ltd.

37,732

0.3

Pass throughmaster lease

A79

Revest Honjin

1,933.80

1,764.38

80

73

1

Mininet, Inc.

29,712

0.3

Pass throughmaster lease

A80

Revest Matsubara

1,955.40

1,845.67

70

66

1

Mininet, Inc.

28,3880.2

Pass throughmaster lease

A82

Alba Noritake Shinmachi

1,731.68

1,623.10

64

60

1

Mininet, Inc.

25,132

0.2

Pass throughmaster lease

A83

Revest Meieki Minami

1,634.60

1,485.44

61

55

1

Mininet, Inc.

24,9790.2

Pass throughmaster lease

A84

Revest Heian

1,554.03

1,479.03

40

37

1

Mininet, Inc.

23,656

0.2

Pass throughmaster lease

A85

Vendir Hamaotsu Ekimae

2,670.66

2,610.15

81

79

1

Mininet, Inc.

33,2790.3

Pass throughmaster lease

A86

Salvo Sala

1,428.12

1,428.12

54

54

1

Goodworks Co., Ltd.

25,620

0.2

Pass throughmaster lease

A87

Excellente Kagurazaka

701.92660.7333

31

1

Goodworks Co., Ltd.

17,974

0.2

Pass throughmaster lease

A88

Luna Court Edobori

1,185.50

1,114.09

50

47

1

Goodworks Co., Ltd.

20,7680.2

Pass throughmaster lease

A89

Winntage Kobe Motomachi

1,433.35

1,358.70

57

54

1

Goodworks Co., Ltd.

20,880

0.2

Pass throughmaster lease

A90

Queen's Court Fukuzumi

765.18686.3125

22

1Goodworks Co., Ltd.

17,200

0.2

Pass throughmaster lease

A91

Corp Higashinotoin

1,029.05

1,005.61

42

41

1

Goodworks Co., Ltd.

19,847

0.2

Pass throughmaster lease

A92

Belair Oimachi

530.60492.80

26

24

1

Goodworks Co., Ltd.

14,697

0.1

Pass throughmaster lease

A93

Siete Minami-Tsukaguchi

1,020.86

919.5240

36

1Goodworks Co., Ltd.

16,625

0.1

Pass throughmaster lease

A94

Prime Life Sannomiya Isogami
Koen

789.12789.12

32

32

1

Goodworks Co., Ltd.

15,321

0.1

Pass throughmaster lease

A95

HERMITAGE NANBA WEST

992.76992.7621

21

1

Goodworks Co., Ltd.

15,767

0.1

Pass throughmaster lease

A96

Century Park Shinkawa
1-bankan

1,477.62

1,410.28

44

42

1

Goodworks Co., Ltd.

17,0180.1

Pass throughmaster lease

A97

West Avenue

794.80695.4640

35

1Goodworks Co., Ltd.

10,715

0.1

Pass throughmaster lease

A98

Little River Honmachibashi

974.81884.5031

28

1Goodworks Co., Ltd.

12,8380.1

Pass throughmaster lease

A99

Prime Life Mikage

761.18736.2228

27

1

Goodworks Co., Ltd.

12,2090.1

Pass throughmaster lease

A100

City Court Kitaichijo

5,230.18

5,027.65

127

122

1

Big Service Co., Ltd.

66,200

0.6

Pass throughmaster lease

A101

Lieto Court Mukojima

2,940.20

2,911.22

82

81

1

Mitsui Home Estate Co., Ltd.

54,091

0.5

Pass throughmaster lease

A102

Lieto Court Nishi-Ojima

2,048.28

2,027.36

91

90

1

Mitsui Home Estate Co., Ltd.

48,298

0.4

A103Royal Parks Momozaka

8,776.26

8,214.88

147

147

4

Goodworks Co., Ltd.
(Note 9)148,512

1.3

A104Royal Parks Shinden

15,797.29

15,797.29

248

248

4

Goodworks Co., Ltd.
(Note 11)

215,752

1.9

A105Royal Parks Tower Minami-Senju

39,113.46

36,814.84

557

524

1

Goodworks Co., Ltd.
(Note 12)744,215

6.5

A106Royal Parks Seasir Minami-Senju

6,496.86

6,215.24

113

113

1

Goodworks Co., Ltd.
(Note 12).

96,1860.8

B14

Lexington Plaza Nishigotanda

6,033.58

6,033.58

11

11

7 Community One Co., Ltd.

152,362

1.3

46,566

Pass through0.4
master lease

Pass throughmaster lease
Pass throughmaster lease(Note 10)
Guaranteed
rent and passthroughmaster lease
Pass throughmaster lease
Pass throughmaster lease(Note 13)-

B15

Cross Square NAKANO

2,145.00

2,043.02

45

42

Shin-ei Real Estate1
Business Co., Ltd.

B16

Ohki Aoba Building

2,178.37

1,931.59

13

13

1 One-Eyed Capital Advisers

35,3180.3

Pass throughmaster lease

B17

Lexington Plaza Hachiman

8,419.15

8,419.15

18

18

1 Tokyo Biso Kogyo Corporation

165,805

1.5

Pass throughmaster lease

B18

AEON TOWN Sukagawa

18,440.58

18,440.58

1

1

1 AEONTOWN Co., Ltd.

141,886

1.2

D01

Hotel MyStays Kanda

2,585.72

2,585.72

126

126

1

MyStays Hotel Management
Co., Ltd.

111,117

D02

Hotel MyStays Asakusa

3,327.38

3,327.38

161

161

1

MyStays Hotel Management
Co., Ltd.

106,946

73

Guaranteed
rent
Fixed rent
plus variable
1.0
rent type
operation
Fixed rent
plus variable
0.9
rent type
operation

Property
No.

Property nameLeasable area2(m )(Note 1)

Leased area2(m )(Note 2)

Leasableunits(units)(Note 3)

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

Tenants (Note 6)

Rental revenue(JPY thousand)(Note7)

Ratio ofrentalrevenue(%)(Note 17)
2.8

Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
1.6
rent type
operation

D03

Hotel MyStays Kyoto-Shijo

7,241.51

7,241.51

225

225

1

MyStays Hotel Management
Co., Ltd.

315,937

D04

MyStays Shin-Urayasu
Conference Center

6,232.30

6,232.30

175

175

1

MyStays Hotel Management
Co., Ltd.

187,712

D05

Hotel MyStays Maihama

2,456.36

2,456.36

90

90

1

MyStays Hotel Management
Co., Ltd.

160,018

1.4

D06

Hotel MyStays Dojima

9,445.32

9,445.32

153

153

1

MGH Master Lease Co., Ltd.
(Note 15)

231,470

2.0

D07

Hotel MyStays Nagoya-Sakae

9,064.71

9,064.71

279

279

1

Yugen Kaisha Nagoya HotelManagement

220,601

1.9

D08

Hotel MyStays
Sakaisuji-Honmachi

4,188.83

4,188.83

191

191

1

MyStays Hotel Management
Co., Ltd.

176,288

1.5

D09

Hotel MyStays Yokohama

7,379.43

7,379.43

190

190

1

MyStays Hotel Management
Co., Ltd.

127,889

1.1

D10

Hotel MyStays Nippori

1,719.29

1,719.29

93

93

1

MyStays Hotel Management
Co., Ltd.

61,1520.5

D11Hotel MyStays
Fukuoka-Tenjin-Minami

3,412.71

3,412.71

177

177

1

MyStays Hotel Management
Co., Ltd.

167,915

1.5

D12

Flexstay Inn Iidabashi

2,953.38

2,953.38

62

61

1

MyStays Hotel Management
Co., Ltd.

52,6820.5

D13Hotel MyStays Ueno Inaricho

1,150.76

1,150.76

72

72

1

MyStays Hotel Management
Co., Ltd.

50,4620.4

D14

Flexstay Inn Shinagawa

1,134.52

1,134.52

55

55

1

MyStays Hotel Management
Co., Ltd.

42,9550.4

D15

Flexstay Inn Tokiwadai

2,539.75

2,539.75

130

129

1

MyStays Hotel Management
Co., Ltd.

53,861

0.5

D16

Flexstay Inn Sugamo

2,089.86

2,089.86

105

105

1

MyStays Hotel Management
Co., Ltd.

49,6540.4

D17Hotel MyStays Otemae

4,956.66

4,956.66

111

111

1

MyStays Hotel Management
Co., Ltd.

127,898

1.1

D18

Flexstay Inn Kiyosumi Shirakawa

2,673.64

2,673.64

56

56

1

MyStays Hotel Management
Co., Ltd.

36,9330.3

D19

Flexstay Inn Nakanobu P1

770.56770.5639

39

1

MyStays Hotel Management
Co., Ltd.

17,3740.2

D20

Flexstay Inn Nakanobu P2

391.49391.4922

22

1

MyStays Hotel Management
Co., Ltd.

10,1990.1

D21

APA Hotel Yokohama Kannai

6,568.51

6,568.51

452

452

1 APA Hotel Kabushiki Kaisha

229,958

2.0

D22

Hotel Nets Hakodate

7,961.26

7,961.26

205

205

1

Hakodate Hospitality Godo
Kaisha (Note 16)

148,450

1.3

D23

Flexstay Inn Shirogane

1,754.06

1,754.06

84

84

1

MyStays Hotel Management
Co., Ltd.

50,7880.4

D24

Hotel MyStays Haneda

5,400.16

5,400.16

174

174

1

MyStays Hotel Management
Co., Ltd.

187,483

1.6

D25

Hotel MyStays Kameido P1

4,349.67

4,349.67

266

266

1

MyStays Hotel Management
Co., Ltd.

180,675

1.6

D26

Hotel MyStays Ueno Iriyaguchi

2,247.92

2,247.92

97

97

1

MyStays Hotel Management
Co., Ltd.

92,2020.8

74Type oflease(Note 8)Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation

Property
No.

Property nameLeasable area2(m )(Note 1)

Leased area2(m )(Note 2)

Leasableunits(units)(Note 3)

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

Tenants (Note 6)

Rental revenue(JPY thousand)(Note7)

Ratio ofrentalrevenue(%)(Note 17)
1.1

D27

Hotel MyStays Kameido P2

2,793.99

2,793.99

177

177

1

MyStays Hotel Management
Co., Ltd.

123,808

D28

Hotel Vista Shimizu

3,559.81

3,559.81

152

152

1

Vista Hotel Management Co.,Ltd.

82,140

D29

Super Hotel
Shinbashi/ Karasumoriguchi

1,403.89

1,403.89

74

74

1

Super Hotel Co., Ltd.

39,426

D30

Flexstay Inn Higashi-Jujo

1,714.53

1,714.53

89

88

1

MyStays Hotel Management
Co., Ltd.

37,747

D31

Hotel MyStays Utsunomiya

11,733.23

11,733.23

126

126

1

MyStays Hotel Management
Co., Ltd.

95,975

D32

Flexstay Inn Kawasaki-Kaizuka

1,190.57

1,190.57

64

64

1

MyStays Hotel Management
Co., Ltd.

32,833

D33

Comfort Hotel Toyama

3,305.64

3,305.64

150

150

1

Greens Co., Ltd.

35,928Type oflease(Note 8)Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
0.7
rent type
operation
0.3

Fixed rent

Fixed rent
plus variable
0.3
rent type
operation
Fixed rent
plus variable
0.8
rent type
operation
Fixed rent
plus variable
0.3
rent type
operation
0.3

Fixed rent

Fixed rent
plus variable
0.3
rent type
operation
Fixed rent
plus variable
0.9
rent type
operation

D34

Flexstay Inn
Kawasaki-Ogawacho

725.60725.606262

1MyStays Hotel Management
Co., Ltd.

29,409D35

Flexstay Inn Ekoda

3,932.93

3,932.93

210

210

1

MyStays Hotel Management
Co., Ltd.

104,046

D36

Super Hotel Tokyo-JR Tachikawa
Kitaguchi

1,832.97

1,832.97

96

96

1

Super Hotel Co., Ltd.

31,787

0.3

Fixed rent

D37Super Hotel JR Ueno-iriyaguchi

1,279.16

1,279.16

69

69

1

Super Hotel Co., Ltd.

27,275

0.2

Fixed rent

88,880

Fixed rent
plus variable
0.8
rent type
operation

D38

Hotel MyStays Shinsaibashi

1,942.01

1,942.01

57

57

1

MyStaysCo., Ltd.

Hotel

Management

D39

Comfort Hotel Kurosaki

3,207.60

3,207.60

151

151

1

Greens Co., Ltd.

37,894

0.3

Fixed rent

D40

Comfort Hotel Maebashi

3,660.96

3,660.96

154

154

2

Greens Co., Ltd.

43,811

0.4

Fixed rent

D41

Comfort Hotel Tsubame-Sanjo

3,099.90

3,099.90

133

133

2

Greens Co., Ltd.

34,9490.3

Fixed rent

D42

Comfort Hotel Kitami

3,009.50

3,009.50

127

127

1

Greens Co., Ltd.

30,3000.3

D43

Hotel MyStays Gotanda Station

10,137.88

10,137.88

385

385

1

MyStays Hotel Management
Co., Ltd.

D44

Hotel Epinard Nasu

37,702.33

37,702.33

310

310

1

Naqua Hotels and Resorts
Management Co., Ltd.

D45

Hotel MyStays Fukuoka Tenjin

5,083.06

5,083.06

217

217

1

D46

Hotel MyStays Hamamatsucho

1,951.90

1,951.90

105

105

D47

Hotel MyStays Premier Kanazawa

13,250.03

13,250.03

261

D48

Takamatsu Tokyu REI Hotel

7,148.17

7,148.17

193

427,047

3.7

1,103,226

9.7

MyStays Hotel Management
Co., Ltd.

237,370

2.1

1MyStays Hotel Management
Co., Ltd.

114,084

1.0

261

1

MyStays Hotel Management
Co., Ltd.

368,625

3.2

193

3

Tokyu Hotels Co., Ltd.

106,156

0.9

D49

Hotel MyStays Premier
Hamamatsucho

6,151.93

6,151.93

134

134

1

MyStays Hotel Management
Co., Ltd.

228,976

2.0

D50

Hotel MyStays Shin Osaka
Conference Center

13,026.99

13,026.99

397

397

1

MyStays Hotel Management
Co., Ltd.

267,910

2.3

D51

Hotel MyStays Premier Omori

11,849.61

11,849.61

232

232

1

MyStays Hotel Management
Co., Ltd.

160,256

1.4

D52

Beppu Kamenoi Hotel

19,422.08

19,422.08

322

322

1

Beppu Hotel Management
Godo Kaisha (Note 15)

221,531

1.9

D53

Hotel MyStays Sapporo Station

7,267.88

7,267.88

242

242

1

MyStays Hotel Management
Co., Ltd.

108,9541.0

508,518.23

499,438.86

13,261

13,024141－

11,403,236

100.0

Total (Note 17)(Note 1)

Fixed rent
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation－“Leasable Area” is the total leasable floor area for guest room, residential, office, retail and others, for each real estate or real estate in75

trust.
(Note 2)

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

(Note 3)

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

(Note 4)

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

(Note 5)

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

(Note 6)

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

(Note 7)

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

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

(Note 9)The master lessee and property manager was changed to Goodworks Co., Ltd. on August 1, 2017.

(Note 10) With the change described in Note 9, the type of lease for the residential portion was changed from “guaranteed rent” to“pass-through master lease.”(Note 11) The master lessee and property manager was changed to Goodworks Co., Ltd. on July 1, 2017.
(Note 12) The master lessee and property manager was changed to Goodworks Co., Ltd. on December 1, 2017.
(Note 13) With the change described in Note 12, the type of lease for the residential portion was changed from “guaranteed rent” to“pass-through master lease.”(Note 14) The operator to which the tenant entrusts management of hotel operations was changed to MyStays Hotel Management Co., Ltd. on
August 1, 2017.
(Note 15) The master lessee and property manager was changed to MyStays Hotel Management Co., Ltd. on February 1, 2018.
(Note 16) The operator to which the tenant entrusts management of hotel operations is scheduled to be changed to MyStays Hotel Management
Co., Ltd. on May 1, 2018.
(Note 17) “Ratio of rental revenue (%)” is calculated including rental revenue of properties sold during the period (Casa Eremitaggio, Lexel
Mansion Ueno Matsugaya, Sun Terrace Minami Ikebukuro, Kindai Kagaku Sha Building, Shinjuku Island and Times
Kanda-Sudacho 4th).

76

bOccupancy trend(Unit: %)Property
No.

A26
A27

Property nameNisshin Palacestage
Daitabashi
Nisshin Palacestage
Higashi-Nagasaki

24th
25th
26th
27th
28th
fiscal period fiscal period fiscal period fiscal period fiscal period
As of
As of
As of
As of
As of
the end of
the end of
the end of
the end of
the end ofJune 2015
Dec. 2015
June 2016
Dec. 2016
June 2016

As ofthe end of
Jul. 2017

As of
the end of
Aug. 201729th
fiscal period
As of
As of
the end of
the end of
Sept. 2017
Oct. 2017

As of
the end of
Nov. 2017

As of
the end of
Dec.2017

96.9

96.1

97.0

98.0

89.8

93.0

92.9

93.0

92.0

93.1

92.9

94.9

96.8

93.2

96.5

93.6

90.6

94.0

97.4

95.8

97.2

97.2

A28

Growth Maison Gotanda

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

A29

Growth Maison
Kameido

95.4

97.0

95.5

92.4

92.4

93.9

92.4

95.4

92.4

94.0

94.0

A30

Emerald House

100.0

97.9

100.0

96.9

98.9

97.9

97.9

95.8

95.8

95.8

96.8

A31

Harmonie Ochanomizu

88.3

90.8

100.0

100.0

97.5

92.3

97.5

96.1

97.4

100.0

97.4

A32
A33
A34

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

97.4

97.0

84.3

94.0

94.7

94.7

94.7

94.7

94.7

100.0

100.0

97.0

97.2

89.7

94.2

97.1

91.3

87.0

88.4

89.9

88.4

95.5

100.0

100.0

98.3

95.2

90.6

90.6

89.0

89.0

89.0

89.0

87.5

A35

Grand Rire Kameido

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

A36

Growth Maison
Ikebukuro

88.1

97.6

97.6

100.0

95.2

90.4

90.4

92.8

95.3

97.6

97.6

A37

Growth Maison Yoga

94.9

94.8

97.5

94.8

92.4

89.8

92.4

97.5

94.9

94.9

97.4

A38

Route Tachikawa

96.6

96.6

93.2

100.0

89.8

86.4

89.8

89.8

96.6

100.0

100.0

A39

Shibuya-Honmachi
Mansion

89.9

96.4

95.9

91.9

100.0

100.0

86.7

91.3

95.5

93.4

91.3

A40
A41
A42

City Heights Kinuta
Acseeds Tower
Kawaguchi-Namiki
Capital Heights
Kagurazaka

94.6

89.2

100.0

94.6

89.2

89.2

89.2

83.8

83.8

94.6

94.6

100.0

86.0

94.8

89.4

98.3

94.8

93.0

93.0

98.3

98.3

96.5

94.4

97.2

97.2

97.2

83.4

91.0

100.0

100.0

100.0

97.2

97.2

A43

College Square Machida

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

A44

Belair Meguro

100.0

96.0

96.1

92.1

92.0

87.9

96.0

83.9

87.9

91.9

92.1

A45

Wacore Tsunashima I

98.0

91.9

98.0

89.9

92.1

92.1

92.1

92.1

94.1

94.1

94.1

A46

Foros Nakamurabashi

90.5

100.0

96.2

91.2

97.5

97.5

92.6

95.1

97.5

97.5

97.5

A47

Growth Maison Kaijin

87.3

96.7

97.7

97.4

100.0

100.0

96.7

96.7

100.0

96.7

96.7

A48

College Square Machiya

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

A51

City House Tokyo
Shinbashi

97.1

98.6

96.1

93.3

92.8

93.9

92.0

94.1

94.6

96.7

96.5

A52

Winbell Kagurazaka

95.4

98.3

98.6

95.5

98.4

96.2

94.6

96.1

97.1

96.0

97.9

92.1

97.5

100.0

95.8

100.0

95.4

98.5

98.5

97.3

97.2

98.8

93.5

98.8

95.4

96.7

96.6

95.5

94.5

91.2

95.7

97.9

96.5

A53
A54

Nishiwaseda Cresent
MansionLexington Square
Akebonobashi

A56

Casa Eremitaggio

84.2

100.0

100.0

96.7

94.0

94.0

94.0

100.0

100.0

100.0

-

A59

Towa City Coop
Shinotsuka II

96.3

96.4

97.6

96.3

91.4

95.0

91.4

97.6

97.6

98.8

98.8

Bichsel Musashiseki

98.5

97.1

95.7

91.5

95.7

94.3

94.3

97.1

98.6

97.2

94.4

100.0

100.0

100.0

96.4

92.7

96.3

92.7

92.7

96.3

96.3

-

83.0

93.1

91.1

89.7

83.8

84.4

84.6

84.6

84.6

84.2

84.2

A61
A62
A63

Lexel Mansion Ueno
Matsugaya
Towa City Coop
Sengencho

A64

Royal Park Omachi

98.3

98.3

96.7

92.8

98.3

96.7

95.0

98.3

92.5

96.4

94.5

A65

Lexington Square
Haginomachi

92.4

92.6

100.0

92.1

89.5

86.9

82.6

85.2

92.2

94.8

94.8

Visconti Kakuozan

78.3

86.3

100.0

83.8

88.6

88.6

88.6

88.6

72.5

83.8

83.8

93.0

90.1

97.2

92.9

92.2

90.8

92.9

95.0

97.9

97.9

100.0

91.1

97.0

94.1

96.9

94.0

94.0

91.1

91.1

97.0

100.0

97.0

83.3

94.3

87.6

86.1

79.7

78.3

80.8

79.7

83.6

81.9

81.2

Spacia Ebisu

93.6

95.6

91.7

94.0

95.2

95.4

97.5

93.5

95.4

91.2

91.2

Neo Prominence

94.9

96.6

96.2

95.0

91.2

89.5

93.0

96.4

100.0

100.0

100.0

88.4

94.9

98.2

81.5

91.7

95.0

94.5

96.3

95.4

99.1

100.0

96.2

96.2

96.3

86.5

95.3

96.5

96.5

98.8

100.0

100.0

98.7

A66
A71
A72
A73
A75
A76
A77
A78

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

Invoice Shin-Kobe
Residence
Cosmo Court
Motomachi

77

Property
No.

A79

Property name

24th
25th
26th
27th
28th
fiscal period fiscal period fiscal period fiscal period fiscal period
As of
As of
As of
As of
As of
the end of
the end of
the end of
the end of
the end ofJune 2015
Dec. 2015
June 2016
Dec. 2016
June 2016

As ofthe end of
Jul. 2017

As of
the end of
Aug. 201729th
fiscal period
As of
As of
the end of
the end of
Sept. 2017
Oct. 2017

As of
the end of
Nov. 2017

As of
the end of
Dec.2017

Revest Honjin

100.0

98.8

97.5

95.0

92.5

91.3

91.3

88.8

88.8

92.5

91.2

Revest Matsubara

89.5

93.1

88.7

91.8

93.1

93.1

91.9

90.6

90.6

94.4

94.4

97.4

97.4

100.0

97.4

86.8

92.1

94.7

94.7

92.1

94.7

-

98.6

91.0

97.2

91.0

87.5

90.3

90.2

91.0

93.7

93.7

93.7

Revest Meieki Minami

100.0

100.0

96.6

93.6

95.4

90.5

90.5

92.1

90.5

90.9

90.9

A84

Revest Heian

92.0

100.0

100.0

88.7

100.0

100.0

95.2

96.8

98.4

95.2

95.2

A85

Vendir Hamaotsu
Ekimae

88.4

88.4

95.3

93.4

98.5

96.3

96.3

95.3

93.8

96.2

97.7

A86

Salvo Sala

94.4

98.0

100.0

96.7

95.9

98.5

100.0

100.0

100.0

100.0

100.0

A87

Excellente Kagurazaka

97.1

91.2

97.1

88.3

94.1

97.1

91.2

91.2

91.2

91.2

94.1

A88

Luna Court Edobori

94.0

96.0

96.0

98.0

94.0

94.0

98.0

95.9

93.9

96.0

94.0

A89

Winntage Kobe
Motomachi

94.7

85.9

86.0

80.7

85.9

82.4

89.3

90.9

94.9

92.9

94.8

A90

Queen's Court Fukuzumi

100.0

95.9

93.1

96.6

95.9

96.6

96.6

100.0

96.6

96.6

89.7

A91

Corp Higashinotoin

95.7

97.9

90.8

95.2

97.6

100.0

97.6

92.7

95.1

97.6

97.7

Belair Oimachi

96.1

96.4

100.0

92.9

96.1

96.1

89.0

89.0

96.4

96.4

92.9

92.6

95.0

97.5

97.5

95.0

100.0

95.0

97.5

90.0

90.1

90.1

93.8

100.0

93.8

87.5

96.9

100.0

96.9

100.0

100.0

100.0

100.0

95.7

91.2

100.0

88.0

100.0

96.0

100.0

100.0

100.0

100.0

100.0

91.0

91.0

95.4

90.9

88.7

91.0

86.5

88.7

93.2

90.9

95.4

A80
A81
A82
A83

A92
A93
A94
A95
A96

Sun Terrace Minami
IkebukuroAlba Noritake
Shinmachi

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

A97

West Avenue

75.0

80.0

85.0

87.5

85.0

80.0

80.0

75.0

77.5

87.5

87.5

A98

Little River
Honmachibashi

96.9

100.0

100.0

96.9

87.7

87.7

90.8

90.7

90.7

90.7

90.7

A99

Prime Life Mikage

86.8

100.0

96.7

86.8

96.6

96.6

96.7

96.7

93.4

93.4

96.7

A100

City Court Kitaichijo

－

96.6

95.7

94.8

93.8

97.1

97.2

98.8

98.2

98.2

96.1

A101

Lieto Court Mukojima

－

97.6

96.8

95.3

97.0

97.0

95.0

94.1

95.0

95.1

99.0

Lieto Court Nishi-Ojima

－

100.0

98.0

96.8

99.0

99.0

97.8

97.8

97.8

98.0

99.0

－

－

100.0

100.0

100.0

100.0

89.4

89.9

89.0

92.2

93.6

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

－

－

－

92.7

93.5

93.5

94.5

94.5

94.3

94.1

－

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

95.7

90.6

90.6

90.6

90.6

100.0

－

－

－

－

－

－

A102
A103
A104
A105
A106
B08

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

B09

Shinjuku Island

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

B14

Lexington Plaza
Nishigotanda

100.0

100.0

100.0

91.8

100.0

100.0

100.0

100.0

100.0

100.0

100.0

B15

Cross Square NAKANO

70.8

79.1

84.1

89.1

87.3

90.5

93.7

93.7

93.6

95.2

95.2

B16

Ohki Aoba Building

B17
B18
C01
D01
D02
D03
D04

100.0

100.0

83.6

83.6

88.7

88.7

88.7

88.7

88.7

88.7

88.7

100.0

100.0

98.8

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

－

－

－

－

－

Hotel MyStays Kanda

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

Hotel MyStays Asakusa

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

Lexington Plaza
Hachiman
AEON TOWN
Sukagawa
Times Kanda-Sudacho
4thHotel MyStays
Kyoto-Shijo
MyStays Shin-Urayasu
Conference Center

D05

Hotel MyStays Maihama

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D06

Hotel MyStays Dojima

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D07
D08

Hotel MyStays
Nagoya-Sakae
Hotel MyStays
Sakaisuji-Honmachi

78

Property
No.

Property name

24th
25th
26th
27th
28th
fiscal period fiscal period fiscal period fiscal period fiscal period
As of
As of
As of
As of
As of
the end of
the end of
the end of
the end of
the end ofJune 2015
Dec. 2015
June 2016
Dec. 2016
June 2016

As ofthe end of
Jul. 2017

As of
the end of
Aug. 201729th
fiscal period
As of
As of
the end of
the end of
Sept. 2017
Oct. 2017

As of
the end of
Nov. 2017

As of
the end of
Dec.2017

D09

Hotel MyStays
Yokohama

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D10

Hotel MyStays Nippori

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D11

Hotel MyStays
Fukuoka-Tenjin-Minami

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D12

Flexstay Inn Iidabashi

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D13

Hotel MyStays Ueno
Inaricho

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D14

Flexstay Inn Shinagawa

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D15

Flexstay Inn Tokiwadai

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D16

Flexstay Inn Sugamo

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

Hotel MyStays Otemae

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

Hotel Nets Hakodate

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D23

Flexstay Inn Shirogane

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D24

Hotel MyStays Haneda

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D17
D18
D19
D20
D21
D22

D25
D26
D27
D28
D29
D30
D31
D32

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

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

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D33

Comfort Hotel Toyama

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D34

Flexstay Inn
Kawasaki-Ogawacho

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D35

Flexstay Inn Ekoda

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

Comfort Hotel Kurosaki

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D40

Comfort Hotel Maebashi

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D41

Comfort Hotel
Tsubame-Sanjo

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D42

Comfort Hotel Kitami

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D43

Hotel MyStays
Gotanda Station

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

Hotel Epinard Nasu

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

－

－

－

100.0

100.0

100.0

100.0

100.0

100.0

100.0

－

－

－

－

－

－

－

－

100.0

100.0

100.0

－

－

－

－

－

－

－

－

100.0

100.0

100.0

D36
D37
D38
D39

D44
D45
D46
D47
D48
D49
D50
D51

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

Hotel MyStays
Fukuoka Tenjin
Hotel MyStays
Hamamatsucho
Hotel MyStays PremierKanazawa
Takamatsu Tokyu REI
Hotel
Hotel MyStays Premier
Hamamatsucho
Hotel MyStays Shin
Osaka ConferenceCenterHotel MyStays Premier
Omori

79

24th
25th
26th
27th
28th
fiscal period fiscal period fiscal period fiscal period fiscal period
As of
As of
As of
As of
As of
the end of
the end of
the end of
the end of
the end ofJune 2015
Dec. 2015
June 2016
Dec. 2016
June 2016

Property
No.

Property name

D52

Beppu Kamenoi Hotel

－

－

－

－

D53

Hotel MyStays Sapporo
Station

－

－

－

96.9

98.2

98.5

Total

29th
fiscal period
As of
As of
the end of
the end of
Sept. 2017
Oct. 2017

As of
the end of
Nov. 2017

As of
the end of
Dec.2017

As ofthe end of
Jul. 2017

As of
the end of
Aug. 2017

－

－

－

－

100.0

100.0

100.0

－

－

－

－

－

100.0

100.0

100.0

97.9

97.7

97.7

97.5

97.6

98.1

98.2

98.2

(Note) “Occupancy Rate” is calculated by dividing the leased area by the leasable area, and rounded to the first decimal place.

80