Investment
Invincible Corporation

Audited Financial Statements
for the 33rd Fiscal Period(from July 1, 2019 to December 31, 2019)

INDEX TO FINANCIAL STATEMENTS
Page

Greetings ························································································································································································· 1

Independent Auditor’s Report ········································································································································· 3

Balance Sheet as December 31, 2019 ································································································································ 4Statement of Income and Retained Earnings for the six months ended December 31, 2019 ·································· 6Statement of Changes in Net Assets for the six months ended December 31, 2019 ·············································· 7Statement of Cash Flows for the six months ended December 31, 2019 ································································· 9Notes to Financial Statements as of and for the six months ended December 31, 2019 ········································· 10

Greetings from Naoki Fukuda, Executive Director of Invincible Investment
Corporation and President & CEO of Consonant Investment Management Co., Ltd.
We would like to take this opportunity to express our sincere gratitude to all
unitholders of Invincible Investment Corporation ("INV") for your continued support.
We hereby provide you with a report on INV's asset management and financial results
for the 33rd fiscal period (from July 1, 2019 to December 31, 2019) (the "Reporting
period").
During the Reporting Period, INV raised JPY 24.4 billion through a global offering forthe sixth consecutive year. INV also acquired 18 domestic hotels for JPY 82.6 billion asa result of asset replacement using loans and JPY39.9 billion in proceeds from the saleof two residential properties implemented in the previous fiscal year. The actual NOI
yield on an appraisal basis for the acquired properties was 5.6%, while the actual NOI
yield on a sales price basis was 3.9%.
In December 2019, we decided to sell two residential properties at JPY 9.6 billion (NOI
yield on sale price basis: 3.4%) and acquire two hotels at JPY 16.2 billion (NOI yield on
appraisal basis: 5.8%), with the aim of further improving profits by replacing assets,
and recorded a gain of JPY1.9 billion on the sale of one property in the Reporting
Period. As a result, retained earnings, which will be used to ensure the stability of
DPU in the future, increased by JPY 1.1 billion from the end of the previous fiscal
period to JPY 12.7 billion at the end of the Reporting Period, and amounted to JPY 2,090
per investment unit.
Although we have actively managed assets in this manner, the NOI of the domestic
hotel portfolio decreased due to several major typhoons and the deterioration of JapanKorea relations. Meanwhile, the overseas hotel portfolio is performing well, and the
NOI of the residential portfolio is also growing steadily.
As a result, operating revenues reached JPY 18,587 million, operating income JPY
12,858 million, and net income JPY 11,638 million (Note 1). INV decided on a
distribution per unit (DPU) of JPY 1,725 for December 2019 fiscal period (+2.5% year on
year (Note 2)) and annual DPU of JPY 3,381 for 2019.
The two domestic hotel properties acquired in January 2020 are all of a full-service type,and since they are hotels in areas that were not previously owned, further
diversification is proceeding in terms of both the type of hotel portfolio and the region.
In addition, both hotels are located in markets where new supply of hotels is limited
and tourism demand is growing. By acquiring these two properties, we expanded ourportfolio and realized risk diversification with the aim of further improving
profitability and stability.
As of February 28, 2020, INV's assets totaled JPY 511.6 billion on an acquisition-pricebasis, of which 88% was hotels. INV has grown into an investment corporation thatowns the largest hotel portfolio in J-REIT. In addition, JCR raised the credit rating of
INV from A (positive) to A+ (stable) on February 4, 2020.
Since the beginning of this year, the outlook has remained uncertain due to theoutbreak of the new coronaviral virus, and it might have our investors be concerned
about the impact on INV. However, as described above, as much of the gain on sales
has been accumulated as internal reserves, and INV intends to strive for stable DPU byutilizing it as necessary in the future. Specifically, we are targeting an annual DPU ofnot less than JPY 3,400.
Your continued support is highly appreciated.
Naoki Fukuda
Executive Director, Invincible Investment Corporation
President & CEO, Consonant Investment Management Co., Ltd.

(Note 1) Compared with June 2019, sales revenues were -32%, operating revenues were -42%, and net revenues were 45%, resulting in a $11.1 thousand million sale of 2 residences during June 2019.
(Note 2) Comparison with the fiscal period ended December 2018. In order to eliminate the seasonal effects of hotel
variable rent, which is one of the major revenues of INV, the comparison is made with the same period in theprevious year and not with the previous fiscal period (ended June 2019).

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

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

INVINCIBLE INVESTMENT CORPORATIONBALANCE SHEETAs of December 31, 2019
As ofDecember 31,
2019

June 30,2019

December 31,
2019(in thousands of
U.S. dollars)(in thousands of yen)
ASSETS
Current assets:
Cash and bank deposits (Notes 5 and 17) ·····················¥····················· 48,833,358
Cash and bank deposits in trust (Notes 5 and 17) ··················································
6,766,348
Accounts receivable ·········································································································
647,210
Rental receivables ·············································································································
2,758,865
Deposits paid ·····················································································································
371,720
Prepaid expenses ··············································································································
483,656
Income taxes receivable····································································································
168,970
Consumption taxes receivable ····················································································· Other ····································································································································· Allowance for doubtful accounts ················································································(148)
Total current assets ·········································································································
60,029,983
Non-current assets:
Property and equipment (Notes 6 and 7):
Buildings, at cost ···············································································································
19,142,244
Buildings and accompanying facilities, at cost ························································
5,111,168
Tools, furniture and fixtures, at cost ·············································································
1,069,418
Construction in progress··································································································
9,817
Buildings in trust, at cost ································································································
130,105,036
Buildings and accompanying
29,757,547
facilities in trust, at cost ···································································································
Structures in trust, at cost ·······························································································
227,665
Tools, furniture and fixtures in trust, at cost ·······································
1,816,296
Land in trust ·······················································································································
199,037,787
Construction in progress in trust ···················································································
14,364
Subtotal ·······························································································································
386,291,346
Less: Accumulated depreciation ························································ (21,466,694)
Total property and equipment, net ············································································
364,824,652
Intangible assets:
Leasehold rights ················································································································
10,637,811
Leasehold rights in trust ·································································································
12,864,608
Total intangible assets ···································································································
23,502,420
Investments and other assets:
Investment securities (Note 18 and 22)··················································· 17,856,387
Guarantee deposits ···················································································
803,721Long-term prepaid expenses ···································································
601,259
Derivatives assets (Note 19) ·····································································
255,404
Other ················································································································
22,667
Total investments and other assets ······················································ 19,539,440
Total non-current assets ··········································································· 407,866,513
Deferred assets:
Investment corporation bond issuance costs ·······································
35,478
Total deferred assets ····················································································
35,478467,931,975¥
TOTAL ASSETS ····························································································¥¥

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

163,606
99,1485,600
31,476
4,404
6,559
1,255
20,4401
332,492

19,142,244
5,111,514
1,087,303
534,690
159,549,904

174,719
46,6549,924
4,880
1,456,278

33,269,242

303,662

234,0122,382,539
245,771,234
3,179
467,085,865(24,868,562)
442,217,302

2,135
21,7462,243,256
29
4,263,288(226,985)
4,036,302

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

97,095
121,083
218,178

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

162,982
7,335
8,895
1,517
206
180,937
4,435,419

59,55659,556522,431,999

543
543
4,768,455$2

As ofDecember 31,
2019

June 30,2019

December 31,
2019(in thousands of
U.S. dollars)(in thousands of yen)
LIABILITIESCurrent liabilities:
Accounts payable ·····························································¥
Short-term loans payable (Notes 9 and 17) ··············
Current portion of long-term loans payable(Notes 9 and 17) ································································
Accounts payable-other ·················································
Accrued expenses ····························································
Income taxes payable ······················································
Consumption taxes payable ···········································
Advances received ···························································
Deposits received ·····························································
Total current liabilities ··················································
Non-current liabilities:
Investment corporation bonds (Notes 9 and 17) ····
Long-term loans payable (Notes 9 and 17) ··············
Tenant leasehold and security deposits in trust(Note 17) ··············································································
Derivatives liabilities (Note 19) ················ ··········································
Asset retirement obligations (Note 20) ························
Total non-current liabilities ·········································TOTAL LIABILITIES ·······················································NET ASSETS (Note 11)
Unitholders’ equity:
Unitholders’ capital ·························································
Surplus:Capital surplus ·································································
Allowance for temporary differences
Adjustment (Note 4) ······················································
Other deduction of capital surplus ···························
Total deduction of capital surplus ·····························
Capital surplus (net)·························································
Voluntary reserve
Retained earnings ····························································
Total surplus ········································································
Total unitholders’ equity ··············································
Valuation and translation adjustments:
Deferred gains or losses on hedges ······························
Total valuation and translation adjustments ······························TOTAL NET ASSETS ······················································TOTAL LIABILITIES AND NET ASSETS ······································¥

511,902-¥443,004
2,686,000$

4,043
24,516

51,744,000

50,130,000

457,557

136,155
362,920605
2,764,397
454,614
26,15956,000,754

125,221272,659605
798,980
52,12854,508,599

1,142
2,488
5
7,292
475
497,5224,000,000
173,030,000

7,000,000
199,358,000

63,891
1,819,623

1,746,941

1,765,094

16,11075,54332,321
178,884,805
234,885,560

37,00732,539208,192,641
262,701,240

337
297
1,900,261
2,397,784

211,092,540

235,701,512

2,151,346

6,264,432

6,264,432

57,178(131,332)(6,130)(55)(5,398,804)(5,530,137)
734,294(5,524,006)(5,530,137)
734,294(50,419)(50,475)
6,702

21,131,966
21,866,261
232,958,801

23,261,426
23,995,720
259,697,232

212,316
219,018
2,370,365

87,612
87,612233,046,414
467,931,975

33,52533,525
259,730,758
522,431,999

306
306
2,370,671
4,768,455¥$

The accompanying notes are an integral part of these financial statements.

3

INVINCIBLE INVESTMENT CORPORATIONSTATEMENT OF INCOME AND RETAINED EARNINGSFor the six months ended December 31, 2019
For the six months ended
December 31,
2019

June 30,2019

December 31,
2019(in thousands of U.S.
dollars)(in thousands of yen)
Operating revenue
Rental revenue－real estate (Note 12) ·············································· ¥Management contract revenue (Note 13) ········································
Gain on sales of properties (Note 14) ·················································
Dividend income ·····················································································
Distribution income ················································································
Total operating revenue ·········································································
Operating expenses
Property related expenses (Note 12) ··················································
Management contract expenses (Note 13) ······································
Asset management fees ·········································································
Directors’ compensation ········································································
Asset custody fees ····················································································
Administrative service fees ···································································
Provision of allowance for doubtful accounts ································
Other ············································································································
Total operating expenses ·······································································
Operating income ·······················································································
Non-operating income
Interest income··························································································
Foreign exchange gains ·········································································
Interest on tax refund··············································································
Other ··········································································································
Total non-operating income ······························································
Non-operating expenses
Interest expenses ····················································································
Foreign exchange losses ······································································
Interest expenses on investment corporation bonds
Amortization of investment corporation bond issuance costs
Loan-related costs ··················································································
Investment unit issuance costs ··························································
Other-non-operating expenses····························································
Total non-operating expenses ···························································
Ordinary income ·······················································································
Extraordinary income
Subsidy income························································································
Total extraordinary income ·······························································
Extraordinary losses
Loss on reduction entry of non-current assets ·······························
Total extraordinary losses····································································
Income before income taxes ·································································
Income taxes (Note 15):
Current ···································································································
Total income taxes ·············································································Net income ··································································································
Retained earnings / losses brought forward ······························Unappropriated retained earnings / losses (Note 11)······················ ¥12,153,399
580,588
11,117,983
827,477
2,660,220
27,339,670¥

14,545,826
1,397,621
1,970,306
673,498
18,587,253$

132,765
12,756
17,983
6,147
169,653

4,490,658
164,376
300,000
4,800
22,23347,312148
125,069
5,154,599
22,185,070

4,673,007
537,542300,000
4,800
25,51857,444
129,956
5,728,269
12,858,984

42,652
4,906
2,738
43
232
524
1,186
52,284
117,369

811
1,005
800
2,617

179
40,710289
2,091
43,270

1
371
2
19
394

588,555
33,648
11,405
3,506
310,089-

687,208
15,654
4,256
412,550
143,029

6,272
142
38
3,765
1,305

0
947,206
21,240,482

1
1,262,700
11,639,553

0
11,525106,239

115,319
115,319--

115,319
115,319
21,240,482

11,639,553

106,239

605
605
21,239,877(107,910)
21,131,966

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

5
5
106,233
106,083
212,316¥$

The accompanying notes are an integral part of these financial statements.

4

INVINCIBLE INVESTMENT CORPORATIONSTATEMENT OF CHANGES IN NET ASSETSFor the six months ended December 31, 2019
Unitholders' equity
SurplusCapital surplus
Deduction of capital surplus

Unitholders'
capitalCapital surplus

Allowance fortemporarydifferences
adjustment¥¥

Other deduction ofcapital surplus

Capital surplus (net)

Deduction ofcapital surplus(in thousands of yen)
Balance as of January 1, 2019 ···········································································································¥
211,092,540

6,264,432(46,329)¥(5,194,798)¥(5,241,128)¥

1,023,303

Changes during the period ·············································································································
Distributions from surplus ·············································································································
Distributions in excess of retained earnings from

(85,002)

allowance for temporary differences adjustment ···································································
Other distributions in excess of retained earnings ··································································(204,006)(85,002)(85,002)(204,006)(204,006)

Net income ············································································································································
Changes other than unitholders’ equity(net) ············································································
Total changes during the period ···································································································
Balance as of June 30, 2019 ···············································································································¥
211,092,540¥

6,264,432(85,002)¥(204,006)(131,332)¥(5,398,804)(289,008)¥(5,530,137)(289,008)¥

734,294

Changes during the period ·············································································································
Issuance of new investment units ·································································································
24,483,770
Reserve for temporary difference adjustment ·········································································
125,201

125,201(125,201)--

Distributions from surplus ··············································································································Net income ············································································································································
Changes other than unitholders’ equity(net) ············································································
Total changes during the period ···································································································
24,608,971
Balance as of December 31, 2019 ···································································································¥
235,701,512¥

6,264,432

125,201¥(125,201)(6,130)¥(5,524,006)

Unitholders' equity(5,530,137)¥

734,294

Valuation and translation adjustments

SurplusRetainedearnings¥

Total surplus

Total unitholders'equityDeferred gains
or losses onhedgesTotal valuationand translation
adjustments

Total net assets¥¥(in thousands of yen)
Balance as of January 1, 2019 ···········································································································¥
9,140,372¥

10,163,675¥

221,256,215¥

108,684

108,684

221,364,900

Changes during the period ·············································································································
Distributions from surplus ·············································································································(9,248,282)
Distributions in excess of retained earnings fromallowance for temporary differences adjustment ···································································(9,248,282)(9,248,282)(9,248,282)(85,002)(85,002)(85,002)

Other distributions in excess of retained earnings ··································································(204,006)(204,006)(204,006)

Net income ············································································································································
21,239,877

21,239,877

21,239,877

21,239,877

11,702,585

11,702,585

Changes other than unitholders’ equity(net) ·········································································
Total changes during the period ···································································································
11,991,594
Balance as of June 30, 2019 ···············································································································¥
21,131,966¥

21,866,261¥

232,958,801¥(21,072)(21,072)(21,072)(21,072)(21,072)

11,681,513

87,612¥

87,612¥233,046,414

Changes during the period ·············································································································
Issuance of new investment units ·································································································

24,483,770

24,483,770

Reserve for temporary difference adjustment ·········································································(125,201)(125,201)--

Distributions from surplus ··············································································································(9,384,287)(9,384,287)(9,384,287)(9,384,287)

Net income ············································································································································
11,638,948

11,638,948

11,638,948

11,638,948

Changes other than unitholders’ equity(net) ·········································································(54,086)

Total changes during the period ···································································································
2,129,459
Balance as of December 31, 2019 ···································································································¥
23,261,426

2,129,459¥

23,995,720

26,738,431¥

259,697,232(54,086)(54,086)¥

33,525(54,086)(54,086)¥

33,525

26,684,344¥

259,730,758

5Unitholders' equity
SurplusCapital surplus
Deduction of capital surplus

Unitholders'
capitalCapital surplus

Allowance fortemporarydifferences
adjustment$$

Other deduction ofcapital surplus

Capital surplus (net)

Deduction ofcapital surplus(in thousands of U.S dollars)
Balance as of July 1, 2019 ···················································································································$
1,926,730

57,178(1,198)$(49,277)$(50,475)$(50,475)

$

6,702

$

6,702

Changes during the period ·············································································································
Issuance of new investment units ·································································································
223,473
Reserve for temporary difference adjustment ·········································································
1,142

1,142

(1,142)Distributions from surplus ··············································································································Net income ··········································································································································
Changes other than unitholders’ equity(net) ·········································································
Total changes during the period ···································································································
224,616
Balance as of December 31, 2019 ···································································································$
2,151,346$

57,178

1,142
$

(55)

(1,142)$(50,419)

Unitholders' equity-

Valuation and translation adjustments

SurplusRetainedearnings-

Total
unitholders'equityTotal surplus

Deferred gains
or losses onhedgesTotal valuationand translation
adjustments

Total net assets$$(in thousands of U.S dollars)
192,880
Balance as of July 1, 2019 ···················································································································$$

199,582$

2,126,312

$

799

799

2,127,112

Changes during the period ·············································································································
Issuance of new investment units ·································································································

223,473

223,473(85,654)(85,654)(85,654)

106,233

106,233

Reserve for temporary difference adjustment ·········································································(1,142)(1,142)Distributions from surplus ··············································································································(85,654)
106,233
Net income ··········································································································································

106,233

Changes other than unitholders’ equity(net) ·········································································
Total changes during the period ···································································································
19,436
Balance as of December 31, 2019 ···································································································$
212,316

19,436$

219,018

244,052$

2,370,365

$

(493)

(493)

(493)

(493)

(493)

243,559

306

$

306

$

2,370,671

The accompanying notes are an integral part of these financial statements.

6

INVINCIBLE INVESTMENT CORPORATIONSTATEMENT OF CASH FLOWSFor the six months ended December 31, 2019
For the six months ended
June 30,2019

December 31,
2019

December 31,
2019(in thousands of
U.S. dollars)(in thousands of yen)
Cash flows from operating activities:
Income before income taxes ··············································································································································¥
Depreciation and amortization ········································································································································
Loss on reduction entry of non-current assets ············································································································
Investment unit issuance costs············································································································································
Amortization of investment corporation bond issuance costs················································································
Loan-related costs ··································································································································································
Interest income ·······································································································································································
Interest expenses ····································································································································································
Changes in assets and liabilities
Foreign exchange losses (gains) ·······································································································································
Increase (decrease) in allowance for doubtful accounts ··························································································
Decrease (increase) in rental receivables ························································································································
Decrease (increase) in deposits paid ·······························································································································
Decrease (increase) in receivable income taxes ·············································································································
Decrease (increase) in consumption taxes receivable ·······························································································
Increase (decrease) in accounts payable ························································································································
Increase (decrease) in consumption taxes payable ····································································································
Increase (decrease) in accounts payable-other ············································································································
Increase (decrease) in accrued expenses ·······················································································································
Increase (decrease) in advances received ······················································································································
Increase (decrease) in deposits received ························································································································
Decrease in property and equipment in trust due to sale ·······················································································
Decrease in leasehold rights in trust due to sale ·········································································································
Other, net ··················································································································································································
Subtotal ················································································································································································
Interest income received ·····················································································································································
Interest expenses paid ··························································································································································
Income taxes paid ·································································································································································

21,240,482
3,168,320
115,319
3,506
310,089(811)
599,960¥

11,639,553
3,757,778
143,0294,256
412,550(179)
702,863$

106,239
34,298
1,305
38
3,765
(1)
6,415

(23,481)62
285,339
96,4703,830
434,326
22,952
2,764,397
40,334
118,454(117,053)(347,981)
21,268,952
7,047,749(617,969)
56,413,251
811(603,432)(605)(32,090)(148)(344,338)(110,785)
31,539(2,426,511)(36,363)(2,577,357)(29,060)(92,670)(12,896)(199,247)
2,991,980(148,847)
13,673,054
179(701,225)
(605)

(292)
(1)
(3,142)(1,011)
287(22,147)(331)(23,524)
(265)
(845)
(117)
(1,818)27,309(1,358)
124,7991(6,400)(5)

Net cash provided by operating activities ··············································································································

55,810,025

12,971,404

118,395

Cash flows from investing activities:
Purchases of property and equipment ··························································································································
Purchases of property and equipment in trust ···········································································································
Purchases of leasehold rights in trust ·······························································································································
Repayments of tenant leasehold and security deposits in trust ············································································
Proceeds from tenant leasehold and security deposits in trust ················································
Collection of tenant leasehold and security deposits ··································································· ····························
Other, net ··················································································································································································(1,302,310)(323,779)
61,654
896,949(58,789)(543,104)(83,576,781)(440,504)(48,255)
67,02228,651(4,957)(762,840)(4,020)
(440)
611
261

Net cash used in investing activities ··························································································································(726,275)(84,512,972)(771,385)

2,686,000
61,775,000(37,061,000)
2,971,665(839,086)(9,144,041)

24,516563,846(338,271)
27,123(7,658)(83,461)--

24,340,740

222,168

44,729,277

408,262(13)(26,812,304)
55,599,707

0(244,727)
507,481

Cash flows from financing activities:
Proceeds from short-term loans payable ······················································································································
Repayments of short-term loans payable ······················································································································· (1,099,000)
Proceeds from long-term loans payable ······················································································································· 17,684,000
Repayments of long-term loans payable ························································································································ (17,684,000)
Proceeds from issuance of investment corporation bonds·······················································································
Payments for loan-related costs ········································································································································(167,123)
Payments of distributions of earnings······························································································································ (8,993,502)
Payments of distributions in excess of retained earnings from allowance for temporary(85,002)differences adjustment···························································································································································
Payments of other distributions in excess of retained earnings···············································································(204,006)
Proceeds from issuance of investment units ···············································································································Net cash provided by (used in) financing activities ····························································································· (10,548,635)
Effect of exchange rate change on cash and cash equivalents ················································································Net increase (decrease) in cash and cash equivalents ································································································Cash and cash equivalents at beginning of period ····································································································(12)
44,535,102
11,064,604

Cash and cash equivalents at end of period (Note 6) ·································································································¥

55,599,707¥

28,787,403$

262,754

The accompanying notes are an integral part of these financial statements.

7

INVINCIBLE INVESTMENT CORPORATIONNOTES TO FINANCIAL STATEMENTS
As of and for the six months ended December 31, 2019

1. Organization
Invincible Investment Corporation (the“Company”), a real estate investment corporation, was incorporated on January 18, 2002, underthe Act on Investment Trusts and Investment Corporations of Japan (the“Investment Trust Act”) with initial capital of ¥200 million.
The Company is externally managed by a registered asset management company, Consonant Investment Management Co., Ltd. (the“Asset Manager”). The Asset Manager is currently owned 100% by Calliope Godo Kaisha (Calliope). The Company was formed toinvest primarily in properties in Japan.
On May 17, 2004, the Company raised ¥3,377,250 thousand through an initial public offering of 9,000 investment units. As a“comprehensive investment REIT focusing on the Tokyo metropolitan area and on residential properties,” the Company was listed on
the Osaka Securities Exchange in May 2004.
On February 7, 2005, the Company completed its second public offering of 10,650 investment units at a price of ¥369,734 per unit inconnection with a public offering in Japan.
On July 31, 2006, the Company completed its third public offering of 25,000 investment units at a price of ¥332,045 per unit in connection
with a public offering in Japan. The Company was listed on the J-REIT market of the Tokyo Stock Exchange in August 2006 (in order tofocus trading on one securities exchange and reduce administrative tasks and costs accompanying a duplicate listing, the Company
delisted from the Osaka Securities Exchange on October 6, 2007).
Effective on February 1, 2010, the Company executed a five-to-one unit split and 215,596 investment units were issued in connection
with the unit split. Effective on the same day, the Company also merged with LCP Investment Corporation (LCP) and allocated 367,200
investment units at a ratio of 4 units (post-unit split) of the Company per one investment unit of LCP. As a result, investment units issued
and outstanding were 636,695 units as of February 1, 2010.
On July 29, 2011, the Company completed a third party allotment of 711,597 investment units at a price of ¥9,837 per unit.
On December 20, 2013, the Company completed a third party allotment of 224,887 investment units at a price of ¥13,340 per unit.
On July 16, 2014, the Company completed its fourth public offering totaling 1,040,000 new investment units at a price of ¥21,873 per unit.
527,322 of such units were issued in connection with a Domestic Public Offering, and the remaining 512,678 units were issued inconnection with an International Offering pursuant to Rule 144A and Regulation S under the U.S. Securities Act of 1933. On August 13,
2014, the Company issued 55,507 investment units domestically in connection with the exercise of an over-allotment option. Net
proceeds of approximately ¥23.9 billion were used to repay the Company’s outstanding short term borrowings and in connection withthe acquisition of 18 properties during this fiscal period.
On July 15, 2015, the Company completed its fifth public offering totaling 500,000 new investment units at a price of ¥57,817 per unit.
211,250 of such units were issued in connection with a Domestic Public Offering, and the remaining 288,750 units were issued inconnection with an International Offering pursuant to Rule 144A and Regulation S under the U.S. Securities Act of 1933. On August 12,
2015, the Company issued 25,000 investment units domestically in connection with the exercise of an over-allotment option. Net
proceeds of approximately ¥29.3 billion were used to repay the Company’s outstanding long term borrowings and in connection withthe acquisition of 14 properties during this fiscal period.
On March 30, 2016, the Company completed its sixth public offering totaling 459,512 new investment units at a price ¥81,217 per unit.
194,144 of such units were issued in connection with a Domestic Public Offering, and the remaining 265,368 units were issued inconnection with an International Offering pursuant Rule 144A and Regulation S under the U.S. Securities Act of 1933. On April 27, 2016,
the Company issued 22,626 investment units domestically in connection with the exercise of an over-allotment option. Net proceeds ofapproximately ¥37.9 billion were used to repay the Company’s outstanding long term borrowing and in connection with the acquisitionof 6 properties during this fiscal period.
On March 13, 2017, the Company completed its seventh public offering totaling 185,000 new investment units at a price ¥46,897 per unit
in connection with Japanese Primary Offering.

8

On October 12, 2017, the Company completed its eighth public offering totaling 887,959 new investment units at a price ¥44,118 per unit.
515,017 of such units were issued in connection with a Domestic Public Offering, and the remaining 372,942 units were issued inconnection with an International Offering pursuant Rule 144A and Regulation S under the U.S. Securities Act of 1933. On November 1,
2017, the Company issued 44,398 investment units domestically in connection with the exercise of an over-allotment option. Net
proceeds of approximately ¥39.8 billion were used to repay the Company’s outstanding long term borrowing and in connection withthe acquisition of 4 properties and 1 preferred security during this fiscal period.
On August 1, 2018, the Company completed its ninth public offering totaling 909,524 new investment units at a price ¥45,776 per unit.
432,024 of such units were issued in connection with a Domestic Public Offering, and the remaining 477,500 units were issued inconnection with an International Offering pursuant Rule 144A and Regulation S under the U.S. Securities Act of 1933. On August 21,
2018, the Company issued 45,476 investment units domestically in connection with the exercise of an over-allotment option. Net
proceeds of approximately ¥42.2 billion were used to repay the Company’s outstanding long term borrowing and in connection withthe acquisition of 4 properties and 1 TK investment during this fiscal period.
On July 18, 2019, the Company completed its ninth public offering totaling 409,524 new investment units at a price ¥56,939 per unit.
194,524 of such units were issued in connection with a Domestic Public Offering, and the remaining 215,000 units were issued inconnection with an International Offering pursuant Rule 144A and Regulation S under the U.S. Securities Act of 1933. On August 15,
2019, the Company issued 20,476 investment units domestically in connection with the exercise of an over-allotment option. Net
proceeds of approximately ¥24.4 billion were used to repay the Company’s outstanding long term borrowing and in connection withthe acquisition of 18 properties during this fiscal period.

2. Summary of Significant Accounting Policies(a) Basis of Presentation
The Company maintains its accounts and records in conformity with accounting principles and practices generally accepted in Japan(“Japanese GAAP”), including provisions set forth in the Investment Trust Act, the Companies Act of Japan, the Financial Instruments
and Exchange Act of Japan, and other related regulations, which are different in certain respects from the application and disclosure
requirements of International Financial Reporting Standards or accounting principles generally accepted in the United States of America.
The financial statements are prepared based on the Japanese audited financial statements of the Company, which were prepared inaccordance with Japanese GAAP and filed with the Kanto Local Finance Bureau as required by the Financial Instruments and Exchange
Act of Japan. In preparing the accompanying financial statements, certain information in the notes has been added and certain
reclassifications have been made from the financial statements issued domestically for the convenience of the readers outside Japan.
The financial statements are not intended to present the financial position and the results of operations in accordance with accounting
principles and practices generally accepted in countries and jurisdictions other than Japan.
The Company’s fiscal period is a six-month period, which ends at the end of June and December of each year.

Amounts less than ¥1 thousand and US$1 thousand have been rounded down. As a result, the totals shown in the financial statements
and notes thereto do not necessarily agree with the sum of the individual amounts.
The Company does not prepare consolidated financial statements as it has no subsidiaries.
(b) Cash and Cash Equivalents
Cash and cash equivalents consist of cash, demand deposits, and short-term investments which are highly liquid and readily convertible
to cash, have a low risk of price fluctuation, and mature within three months from the date of acquisition.
(c)

Valuation standard and method for securities

Other securities without fair market value are recorded at cost being determined by the moving average method.
(d) Property and Equipment
Property and equipment are recorded at cost. Depreciation of property and equipment, except for land, is calculated on a straight-line
basis over the estimated useful lives of the assets as stated below:
For the six months ended
December 31, 20199

Buildings ··················································································

16-50

Buildings and accompanying facilities ··························

5-29

Tools, furniture and fixtures ··············································

3-10

Buildings in trust ··············································································

5-67

Buildings and accompanying facilities in trust ···························

2-33

Structures in trust ··················································································

9-55

Tools, furniture and fixtures in trust ···············································

2-19(e) Intangible Assets
Amortization of a domestic term leasehold interest for business use is calculated by the straight-line method over the lease term.
(f)Long-term Prepaid Expenses

Long-term prepaid expenses are amortized on a straight-line basis.
(g) Investment Unit Issuance Costs
Investment unit issuance costs are recorded as expenses when incurred.
(h) Investment corporation bond issuance costs
Investment corporation bond issuance costs are amortized using the straight-line method over the period through the redemption of thebonds.
(i)

Allowance for Doubtful Accounts

Allowance for doubtful accounts is provided based on past experience for normal receivables and on a valuation of any receivables fromcompanies and individuals with financial difficulties.
(j)

Conversion of assets and liabilities in foreign currency into Japanese yen

Receivables and payables denominated in foreign currencies are translated into yen at the exchange rate in effect at the balance sheet
date, and differences arising from the translation are included in the statements of income.
(k) Impairment of Fixed Assets
An assessment for impairment is carried out on an asset or group of assets, such as fixed assets, intangible assets and investments,
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the asset or group of assets isdeemed to be impaired, an impairment loss is recognized for the difference between the carrying amount and the recoverable value ofthe asset or group of assets using the discounted cash flow model.
(l)

Accounting Treatment of Trust Beneficiary Interests in Real Estate Trusts

For trust beneficiary interests in real estate trusts, which are commonly utilized to obtain ownership in investment properties in Japanand through which the Company holds all of its real estate, all assets and liabilities with respect to assets in trust, as well as all income
generated and expenses incurred with respect to assets in trust, are recorded in the relevant accounts of the balance sheet and statementof income and retained earnings of the Company in proportion to the percentage that such trust beneficiary interest represents. Certain
material accounts with respect to assets and liabilities in trust are presented separately from other accounts in the balance sheets of theCompany.
(m) Income Taxes
Deferred tax assets and liabilities are computed based on the temporary differences between the financial statement and income tax
basis of assets and liabilities using the applicable statutory tax rate.
(n) Consumption Taxes
Consumption taxes withheld and consumption taxes paid are not included in the statement of income and retained earnings.
Consumption taxes paid are generally offset against the balance of consumption taxes withheld. As such, the excess of payments overamounts withheld are included in current assets and the excess of amounts withheld over payments are included in current liabilities as
the case may be.
(o) Taxes on Property and Equipment

10Property and equipment are subject to various taxes, such as property taxes and urban planning taxes on an annual basis. An owner of aproperty is registered in the record maintained by the local government in each jurisdiction, and such taxes are imposed on the ownerregistered in the record as of January 1 of each year based on the assessment made by the local government.
Under the above tax rules, a seller of a property at the time of disposal is liable for these taxes on the property from the date of disposal tothe end of the calendar year in which the property is disposed. The seller, however, is reimbursed by the purchaser for these accrued tax
liabilities and the amount of settlement reflects this adjustment. For the purchaser, a portion of such taxes calculated from the acquisition
date to the end of the calendar year is capitalized as a cost of the property in accordance with Japanese GAAP. In subsequent calendar
years, half of such taxes on property and equipment for each calendar year are charged as operating expenses in each fiscal period.
Tax on property and equipment capitalized as part of the acquisition cost of properties amounted to ¥111,155 (US$¥1,014) thousand forthe six months ended December 31, 2019.

3. U.S. Dollar Amounts
The Company maintains its accounting records in Japanese yen. The U.S. dollar amounts included in the accompanying financial
statements and notes thereto represent the arithmetical result of translating Japanese yen into U.S. dollars at the rate of ¥109.56 = US$1,
the effective rate of exchange prevailing at December 31, 2019. The inclusion of such U.S. dollar amounts associated with the fiscal six
months ended December 31, 2019 is solely for the convenience of readers outside Japan. Such translations should not be construed as
representations that the Japanese yen amounts represent, or have been, or could be converted into, U.S. dollars at that or any other rate.

4. Allowance for temporary differences adjustment
For the six months ended June 30, 2019
On the Balance Sheet, there are the increase and decrease of allowance for temporary differences adjustment.
1. Reason, related assets and amounts(in thousands of yen)

Related assets,
etc.

Reason for
occurrence

InitialamountBeginningbalance

Allowance
set aside
duringperiodLeaseholdrights in trust

Amortizationofleasehold rights intrust¥ (131,332)¥ (46,329)¥ (85,002)¥ (131,332)¥ (46,329)¥ (85,002)

Total

ReversalduringperiodEndingbalance

Reason for reversal-¥( 131,332)--¥ (131,332)

2. Method of reversal(1) Leasehold rights in trust
Upon the sale of the relevant properties, the corresponding amount is scheduled to be reversed.

For the six months ended December 31, 2019
On the Balance Sheet, there are the increase and decrease of allowance for temporary differences adjustment.
1. Reason, related assets and amounts(in thousands of yen)11

Related assets,
etc.

Reason for
occurrence

InitialamountBeginningbalance

Allowance
set aside
duringperiodReversalduringperiodEndingbalance

Leaseholdrights in trust

Amortizationofleasehold rights intrust¥ (131,332)¥ (131,332)-¥ 125,201¥ (6,130)¥ (131,332)¥ (131,332)-¥ 125,201¥ (6,130)

Total

Reason for reversal

Sale of leasehold rights intrust(in thousands of U.S dollars)

Related assets,
etc.

Reason for
occurrence

Leaseholdrights in trust

Amortizationofleasehold rights in
trust

Beginningbalance

Allowance
set aside
duringperiodReversalduringperiod$ (1,198)$ (1,198)-$ 1,142$ (55)$ (1,198)$ (1,198)-$ 1,142$ (55)

InitialamountTotal

Endingbalance

Reason for reversal

Sale of leasehold rights intrust

2. Method of reversal(1) Leasehold rights in trust
Upon the sale of the relevant properties, the corresponding amount is scheduled to be reversed.

5. Cash and Cash Equivalents
Cash and cash equivalents shown in the statements of cash flows consist of the following balance sheet items.
As ofJune 30,2019

December 31,
2019

December 31,
2019

Cash and bank deposits ···························· ¥Cash and bank deposits in trust ·············

48,833,358
6,766,348¥

17,924,733
10,862,669(in thousands of
U.S. dollars)$
163,606
99,148Cash and cash equivalents ······················· ¥55,599,707¥

28,787,403$(in thousands of yen)

262,754

6. Property and Equipment
The following tables show the summary of movement in property and equipment for the six months ended December 31, 2019.
At costBeginningbalance

Increase

Endingbalance

Decrease

Accumulated
depreciation

Depreciation forthe period

Net property andequipment(in thousands of yen)
Buildings ··········································································¥
19,142,244

¥

-

¥

-

¥

19,142,244¥

278,377¥

215,468¥

18,863,867

Buildings and accompanying facilities ················· 5,111,168

346-

5,111,514

190,462

147,575

Tools, furniture and fixtures········································ 1,069,418

17,884-

1,087,303

64,42549,501

1,022,877

Leasehold rights ······························································10,637,811--

10,637,811--

10,637,811

Construction in progress ············································

4,921,052

9,817

524,872-

534,690--534,690

Buildings in trust ···························································
130,105,036

30,553,244

1,108,376

159,549,904

15,114,933

2,110,465

144,434,970

Buildings and accompanying facilities

3,677,901

166,206

33,269,242

8,355,624

1,030,136

24,913,618

29,757,547

12

in trust ···············································································
Structures in trust ·························································· 227,665

6,347

-

234,012

100,967

5,987

133,045

Tools, furniture and fixtures in trust ······················· 1,816,296

583,038

16,7952,382,539

763,771

159,406

1,618,767

Land in trust ···································································
199,037,787

48,750,503

2,017,056

245,771,234--

245,771,234

Leasehold rights in trust ·············································13,106,766

440,504-

13,547,271

281,395

39,237

13,265,876

3,179

14,364

3,179

-

-

Construction in progress in trust ·····························

14,364

Total ···················································································¥ 410,035,925¥

84,557,823¥

3,322,800¥

491,270,948¥

25,149,957¥

3,757,778

3,179¥

466,120,990

At costBeginningbalance
174,719
Buildings ··········································································$
Buildings and accompanying facilities ················· 46,651

Increase

Accumulated
depreciation

Depreciation forthe period(in thousands of U.S dollars)- $174,719
$

2,540

3

-

46,654

1,738

1,346

-

$

Endingbalance

Decrease

$

$

1,966

Net property andequipment
172,178$

44,916

Tools, furniture and fixtures········································

9,761

163

-

9,924

588

451

9,336

Leasehold rights ······························································

97,095--97,095--97,095Construction in progress ············································

89

4,790

-

4,880

-

-

4,880

Buildings in trust ··························································· 1,187,523
Buildings and accompanying facilities
271,609in trust ···············································································
2,077
Structures in trust ··························································

278,872

10,116

1,456,278

137,960

19,263

1,318,318

33,5691,517

303,662

76,265

9,402

227,397

57

-

2,135

921

54

1,214

16,5785,321

153

21,746

6,971

1,454

14,775Land in trust ··································································· 1,816,701
Leasehold rights in trust ············································· 119,630

444,966

18,4102,243,256--

2,243,256

4,020

-

123,651

2,568

358

121,083

131

29

131

29

-

-

Tools, furniture and fixtures in trust ·······················

Construction in progress in trust ·····························

3,742,569
Total ···················································································$

771,794$

30,328$$4,484,035$

229,554$

34,29829$

4,254,481

Increases in the net book values are mainly due to the acquisition of 18 properties as shown below and capitalized expenditures.
Acquisition cost(in thousands of yen)

Property name

Property No.

Acquisition cost(in thousands ofU.S. dollars)

D64

Hotel MyStays Sapporo Aspen

15,543,000

141,867

D65

Art Hotel Ishigakijima

9,731,000

88,818

D66

Hotel MyStays Fuji Onsen Resort

9,405,000

85,843

D67

Hotel Sonia Otaru

5,930,000

54,125

D68

Hotel MyStays Kanazawa Castle

5,682,000

51,861

D69

Art Hotel Niigata Station

5,524,000

50,419D70

Hotel MyStays Nagoya Nishiki

5,197,000

47,435

D71

Hotel Nord Otaru

4,296,000

39,211

D72

Hotel MyStays Kagoshima Tenmonkan

3,445,000

31,443

D73

Art Hotel Asahikawa

3,197,000

29,180D74

Hotel MyStays Matsuyama

3,098,000

28,276

D75

Hotel MyStays Sapporo Susukino

3,059,000

27,920

D76

Hotel MyStays Sapporo Nakajima Park

2,118,000

19,331

D77

Hotel MyStays Sapporo Nakajima Park Annex

1,584,000

14,457

D78

Flexstay Inn Sakuragicho

1,425,000

13,006D79

MyCUBE by MYSTAYS Asakusa Kuramae

1,287,000

11,746

D80

Hotel MyStays Kagoshima Tenmonkan Annex

1,168,000

10,660D81

Hotel MyStays Nayoro

957,000

8,734

82,646,000

754,344Total

7.Fair Value of Investment and Rental Properties
The following tables show the net book value and the fair value of the investment and rental properties in the aggregate for the six
months ended June 30, 2019 and December 31, 2019.
Residential
As of / For the six months ended

June 30,2019

December 31,
2019(in thousands of yen)

December 31,
2019(in thousands of
U.S. dollars)

Net book value

13

Balance at the beginning of period ··············· ¥85,908,280

Net increase (decrease) during period ········
Balance at the end of period ····························(28,986,463)
56,921,817

Fair value ···································································· ¥72,197,000

56,921,817¥

519,549$(3,368,841)
53,552,976(30,748)
488,800

69,671,000¥

635,916$

Retail facilities
As of / For the six months ended

June 30,2019

December 31,
2019

December 31,
2019(in thousands of
U.S. dollars)(in thousands of yen)
Net book value
Balance at the beginning of period ··············· ¥4,866,739

Net increase (decrease) during period ········
Balance at the end of period ····························(41,503)4,825,236

Fair value ···································································· ¥6,140,000

4,825,236¥

44,041$(35,280)
4,789,956(322)
43,7196,150,000¥

56,133$Hotel
As of / For the six months ended

June 30,2019

December 31,
2019

December 31,
2019(in thousands of yen)(in thousands of
U.S. dollars)

Balance at the beginning of period ··············· ¥291,874,909$

Net increase (decrease) during period ········
Balance at the end of period ····························

34,680,926
326,555,836

Fair value ···································································· ¥393,926,158

Net book value
326,555,836¥

2,980,611

80,684,352
407,240,188

736,439
3,717,051

482,093,260¥

4,400,267$

Total
As of / For the six months ended

June 30,2019

December 31,
2019

December 31,
2019(in thousands of yen)(in thousands of
U.S. dollars)

Balance at the beginning of period ··············· ¥382,649,930$

Net increase (decrease) during period ········
Balance at the end of period ····························

5,652,960
388,302,890

Fair value ···································································· ¥472,263,158

Net book value388,302,890¥

77,280,230
465,583,121

705,369
4,249,572

557,914,260¥

3,544,203$

5,092,317

Notes:
1.Fair value has been determined based on the appraisals or research provided by independent real estate appraisers. City House Tokyo Shinbashi , for which the disposition
agreement was made dated December 9, 2019,was valued at the disposition price2.For rental revenues and expenses for the six months ended June 30, 2019 and December 31, 2019, please refer to “Note 12: Rent Revenues－Real Estate and Expenses Related toProperty Rental Business“

8.Investment corporation bonds
The following table shows the details of investment corporation bonds for the six months ended December 31, 2019.
For the six months ended December 31, 2019
Beginning

EndingBeginning

EndingInterestbalancebalancebalancebalancerate (%)(in thousands of yen)
1st unsecured investment corporation bond(Issued on May 25, 2018 and due on May 25, 2023)(1)(2)
2nd unsecured investment corporation bond(in thousands of U.S. dollars)

1,000,000

1,000,000

9,127

9,127

0.400

1,000,000

1,000,000

9,127

9,127

0.800

14

(Issued on May 25, 2018 and due on May 25, 2028) (1)(2)
3rd unsecured investment corporation bond(Issued on October 12, 2018 and due on October 12, 2023)

2,000,000

2,000,000

18,254

18,2540.550-

1,000,000

-

9,127

0.480

-

2,000,000-

18,2540.900

4,000,000

7,000,000

36,50963,891(1)(3)
4th unsecured investment corporation bond(Issued on October 28, 2019 and due on October 28, 2024)(1)(4)
5th unsecured investment corporation bond(Issued on October 28, 2019 and due on October 26, 2029)(1)(4)
Total investment corporation bonds
Notes:(1)

The bonds were issued with pari passu conditions among specified investment corporation bonds.

(2)

The funds are mainly used to acquire properties in trust.

(3)

The funds are mainly used to repay existing borrowing.

(4)

The funds are mainly used for capital expenditures(5)

Repayment schedule of investment corporation bonds for the next five years after each balance sheet date are as follows:

As of

December 31,

December 31,

2019

2019
(in thousands of
U.S. dollars)(in thousands of yen)
Within 1 year······················································

¥

-

$

-

1-2 years·······························································--

2-3 years··················································································--

3-4 years··················································································

3,000,000

27,3824-5 years··················································································

1,000,000

9,127

-

15

9. Loans Payable
The following table shows the details of loans payable for the six months ended December 31, 2019.
For the six months ended December 31, 2019

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance

Increase(in thousands of yen)

Short-termloanspayable-671,000-

671,000

MUFG
Bank, Ltd.

-671,500-

671,500-

671,500-

672,000-

2,686,000-

2,686,000

MizuhoBank, Ltd.

5,992,000-

5,992,000-

MUFG
Bank, Ltd.

5,992,000-

5,992,000

5,992,000-

3,330,000

Total
short-termloanspayableSumitomo
Mitsui
Banking
CorporationShinseiBank,
Limited.
Citibank,
N.A.,
Japan
Branches

Long-term
loans
payableSumitomo
Mitsui
Trust
Bank,
LimitedResonaBank,
Limited.

Averageinterest
rate (%)(1)(in thousands of U.S. dollars)

MizuhoBank, Ltd.

Sumitomo
Mitsui
Banking
CorporationSumitomo
Mitsui
Trust
Bank,
LimitedEndingbalance

Decrease

-

-

-

6,124

-

6,124

0.269

6,129

-

6,129

0.269

6,129

-

6,129

0.269

6,133

-

6,133

0.269

24,516-

24,51654,691-

54,691

-

0.480

-

54,691-

54,691-

0.480

5,992,000-

54,691-

54,691

-

0.480

-

3,330,000-

30,394-30,394-0.480

3,000,000-

3,000,000-

27,382-

27,382-0.480

2,670,000-

2,670,000-

24,370-24,370

-

0.480

-

671,500-

672,000--

1,335,000-

1,335,000-

12,185-

12,185

-

0.480

MUFG
Bank, Ltd.

668,000-

668,000

-

6,097

-

6,097

-

0.480

MizuhoBank, Ltd.

5,992,000--

5,992,000

54,691--

54,691

0.590

MUFG
Bank, Ltd.

5,992,000--

5,992,000

54,691--

54,691

0.590

5,992,000--

5,992,000

54,691--

54,6910.590

3,330,000--

3,330,000

30,394--30,3940.590

3,000,000--

3,000,000

27,382--

27,3820.590

Sumitomo
Mitsui
Banking
CorporationShinseiBank,
Limited.
Citibank,
N.A.,
Japan
Branches

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed(2)

Unsecured
andunguaranteed

18-Jul-20

18-Jul-20

18-Jul-20

18-Jul-20

16-Jul-19

16-Jul-19

16-Jul-19

16-Jul-19

16-Jul-19

16-Jul-19

16-Jul-19

16-Jul-19

16-Jul-20

16-Jul-20

16-Jul-20

16-Jul-20

16-Jul-20

16Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)
Sumitomo
Mitsui
Trust
Bank,
LimitedEndingbalance

Decrease

Averageinterest
rate (%)(1)(in thousands of U.S. dollars)

2,670,000--

2,670,000

24,370--24,3700.590

1,335,000--

1,335,000

12,185--

12,1850.590

MUFG
Bank, Ltd.

668,000--

668,000

6,097

-

-

6,097

0.590

MizuhoBank, Ltd.

3,682,000-

3,682,000-

33,607-33,607-0.480

3,400,000--

3,400,000

31,033--31,0330.600

MUFG
Bank, Ltd.

850,000--

850,000

7,758

-

-

7,758

0.600

MizuhoBank, Ltd.

965,000--

965,000

8,807

-

-

8,807

0.569

MUFG
Bank, Ltd.

1,125,000--

1,125,000

10,268--

10,2680.569

2,180,000--

2,180,000

19,897--

19,8970.569

570,000--

570,000

5,202

-

-

5,202

0.569

ResonaBank,
Limited.

Sumitomo
Mitsui
Trust
Bank,
LimitedSumitomo
Mitsui
Trust
Bank,
LimitedLong-term
loans
payableIncrease

ShinseiBank,
Limited.
ResonaBank,
Limited.

570,000--

570,000

5,202

-

-

5,202

0.569

650,000--

650,000

5,932

-

-

5,932

0.569

2,000,000--

2,000,000

18,254--

18,2540.569

333,000--

333,000

3,039

-

-

3,039

0.569

270,000--

270,000

2,464

-

-

2,464

0.569

500,000--

500,000

4,563

-

-

4,563

0.569

1,000,000--

1,000,000

9,127

-

-

9,127

0.569

270,000--

270,000

2,464

-

-

2,464

0.569

MizuhoBank, Ltd.

1,965,000--

1,965,000

17,935--

17,9350.669

MUFG
Bank, Ltd.

1,125,000--

1,125,000

10,268--

10,2680.669

MUFG
Bank, Ltd.

Japan Post
Bank Co.,Ltd.
The Bankof
Fukuoka,Ltd.
The
Shizuoka
Bank, Ltd.
The
KagawaBank, Ltd.
The
Hyakugo
Bank, Ltd.
The
NomuraTrust andBankingCo., Ltd.

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

16-Jul-20

16-Jul-20

16-Jul-20

28-Aug-19

22-Jan-21

22-Jan-21

30-Mar-20

30-Mar-20

30-Mar-20

30-Mar-20

30-Mar-20

30-Mar-20

30-Mar-20

30-Mar-20

30-Mar-20

30-Mar-20

30-Mar-20

30-Mar-20

30-Mar-21

30-Mar-21

17

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance

Increase(in thousands of yen)
Sumitomo
Mitsui
Trust
Bank,
LimitedShinseiBank,
Limited.
ResonaBank,
Limited.

MUFG
Bank, Ltd.
The Bankof
Fukuoka,Ltd.
The
Shizuoka
Bank, Ltd.
The
KagawaBank, Ltd.
The
Hiroshima
Bank, Ltd.
The
NomuraTrust andBankingCo., Ltd.

Long-term
loans
payableCitibank,
N.A.,
Japan
Branches
Citibank,
N.A.,
Japan
Branches
AEON
Bank, Ltd.

The Tokyo
Star Bank,
LimitedThe Tokyo
Star Bank,
Limited(4)
The Towa
Bank, Ltd
(4).
The Tokyo
Star Bank,
LimitedMizuhoBank, Ltd.
Developm
ent Bankof Japan
Inc.
ResonaBank,
Limited.
The Bankof
Fukuoka,Ltd.

Endingbalance

Decrease

Averageinterest
rate (%)(1)(in thousands of U.S. dollars)

2,180,000--

2,180,000

19,897--

19,8970.669

570,000--

570,000

5,202

-

-

5,202

0.669

570,000--

570,000

5,202

-

-

5,202

0.669

650,000--

650,000

5,932

-

-

5,932

0.669

1,333,000--

1,333,000

12,166--

12,1660.669

270,000--

270,000

2,464

-

-

2,464

0.669

500,000--

500,000

4,563

-

-

4,563

0.669

1,000,000--

1,000,000

9,127

-

-

9,127

0.669

270,000--

270,000

2,464

-

-

2,464

0.669

1,000,000--

1,000,000

9,127

-

-

9,127

0.569

1,000,000--

1,000,000

9,127

-

-

9,127

0.669

3,000,000--

3,000,000

27,382--

27,3820.669

700,000-

700,000

-

6,389

-

6,389

-

0.465

1,600,000-

1,000,000

600,000

14,603

-

9,127

5,476

0.569

-

1,000,000-

1,000,000

-

9,127

-

9,127

0.569

1,700,000--

1,700,000

15,516--

15,5160.669

634,000--

634,000

5,786

-

-

5,786

0.469

1,000,000--

1,000,000

9,127

-

-

9,127

0.469

333,000--

333,000

3,039

-

-

3,039

0.469

333,000--

333,000

3,039

-

-

3,039

0.469

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

30-Mar-21

30-Mar-21

30-Mar-21

30-Mar-21

30-Mar-21

30-Mar-21

30-Mar-21

30-Mar-21

30-Mar-21

15-Jun-20

15-Jun-21

30-Jun-21

20-Jul-19

20-Jul-20

20-Jul-20

20-Jul-21

14-Mar-20

14-Mar-20

14-Mar-20

14-Mar-20

18

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)
The
NomuraTrust andBankingCo., Ltd.
The Towa
Bank, Ltd.

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

MizuhoBank, Ltd.

ResonaBank,
Limited.
The Bankof
Fukuoka,
Ltd.
The
NomuraTrust andBankingCo., Ltd.
The Towa
Bank, Ltd.

The
Shizuoka
Bank, Ltd.
Long-term
loans
payableThe
Gunma
Bank, Ltd.

Increase

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

333,000--

333,000

3,039

-

-

3,039

0.469

252,000--

252,000

2,300

-

-

2,300

0.469

200,000--

200,000

1,825

-

-

1,825

0.469

165,000--

165,000

1,506

-

-

1,506

0.469

1,633,000--

1,633,000

14,905--

14,9050.569

333,000--

333,000

3,039

-

-

3,039

0.569

333,000--

333,000

3,039

-

-

3,039

0.569

333,000--

333,000

3,039

-

-

3,039

0.569

253,000--

253,000

2,309

-

-

2,309

0.569

200,000--

200,000

1,825

-

-

1,825

0.569

165,000--

165,000

1,506

-

-

1,506

0.569

1,733,000--

1,733,000

15,817--

15,8170.669

333,000--

333,000

3,039

-

-

3,039

0.669

333,000--

333,000

3,039

-

-

3,039

0.669

333,000--

333,000

3,039

-

-

3,039

0.669

AEON
Bank, Ltd.

900,000--

900,000

8,214

-

-

8,214

0.669

The Towa
Bank, Ltd.

253,000--

253,000

2,309

-

-

2,309

0.669

200,000--

200,000

1,825

-

-

1,825

0.669

500,000--

500,000

4,563

-

-

4,563

0.669

165,000--

165,000

1,506

-

-

1,506

0.669

MizuhoBank, Ltd.

ResonaBank,
Limited.
The Bankof
Fukuoka,
Ltd.
The
NomuraTrust andBankingCo., Ltd.

The
Shizuoka
Bank, Ltd.
The
Dai-ichiLife
Insurancecompany,
Limited
The
Gunma
Bank, Ltd.

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

14-Mar-20

14-Mar-20

14-Mar-20

14-Mar-20

14-Mar-21

14-Mar-21

14-Mar-21

14-Mar-21

14-Mar-21

14-Mar-21

14-Mar-21

14-Mar-22

14-Mar-22

14-Mar-22

14-Mar-22

14-Mar-22

14-Mar-22

14-Mar-22

14-Mar-22

14-Mar-22

19

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)
Sumitomo
Mitsui
Banking
CorporationMizuhoBank, Ltd.
The
Dai-ichiLife
Insurancecompany,
LimitedShinseiBank,
Limited.
Citibank,
N.A.,
Japan
Branches
ResonaBank,
Limited.
The Bankof
Fukuoka,Ltd.
AEON
Bank, Ltd.
The
NomuraTrust andBankingCo., Ltd.

Long-term
loans
payableThe
Hiroshima
Bank, Ltd.
ShinseiBank,
Limited.
Citibank,
N.A.,
Japan
Branches
ResonaBank,
Limited.
The Bankof
Fukuoka,Ltd.
AEON
Bank, Ltd.
The
NomuraTrust andBankingCo., Ltd.
The
Hiroshima
Bank, Ltd.

MizuhoBank, Ltd.
Sumitomo
Mitsui
Trust
Bank,
LimitedSumitomo
Mitsui
Banking
CorporationIncrease

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

3,000,000--

3,000,000

27,382--

27,3820.519

4,321,000--

4,321,000

39,439--39,4390.619

3,000,000--

3,000,000

27,382--

27,3820.619

355,000--

355,000

3,240

-

-

3,240

0.369

355,000--

355,000

3,240

-

-

3,240

0.369

334,000--

334,000

3,048

-

-

3,048

0.369

300,000--

300,000

2,738

-

-

2,738

0.369

190,000--

190,000

1,734

-

-

1,734

0.369

167,000--

167,000

1,524

-

-

1,524

0.369

167,000--

167,000

1,524

-

-

1,524

0.369

355,000--

355,000

3,240

-

-

3,240

0.469

355,000--

355,000

3,240

-

-

3,240

0.469

333,000--

333,000

3,039

-

-

3,039

0.469

300,000--

300,000

2,738

-

-

2,738

0.469

190,000--

190,000

1,734

-

-

1,734

0.469

167,000--

167,000

1,524

-

-

1,524

0.469

167,000--

167,000

1,524

-

-

1,524

0.469

500,000--

500,000

4,563

-

-

4,563

0.669

500,000--

500,000

4,563

-

-

4,563

0.669

500,000--

500,000

4,563

-

-

4,563

0.669

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured
andunguarante
ed

14-Sep-20

29-Nov-21

29-Nov-21

13-Oct-20

13-Oct-20

13-Oct-20

13-Oct-20

13-Oct-20

13-Oct-20

13-Oct-20

13-Oct-21

13-Oct-21

13-Oct-21

13-Oct-21

13-Oct-21

13-Oct-21

13-Oct-21

13-Oct-22

13-Oct-22

13-Oct-22

20

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)
ShinseiBank,
Limited.
Citibank,
N.A.,
Japan
Branches
ResonaBank,
Limited.
Developm
ent Bankof JapanInc.
The Bankof
Fukuoka,Ltd.
AEON
Bank, Ltd.
The
NomuraTrust andBankingCo., Ltd.
The
Hiroshima
Bank, Ltd.
The
Dai-ichiLife
Insurancecompany,
LimitedLong-term
loans
payableMizuhoBank, Ltd.
Sumitomo
Mitsui
Trust
Bank,
LimitedSumitomo
Mitsui
Banking
CorporationIncrease

Endingbalance

Decrease

Averageinterest
rate (%)(1)(in thousands of U.S. dollars)

355,000--

355,000

3,240

-

-

3,240

0.669

355,000--

355,000

3,240

-

-

3,240

0.669

333,000--

333,000

3,039

-

-

3,039

0.669

1,500,000--

1,500,000

13,691--

13,6910.669

300,000--

300,000

2,738

-

-

2,738

0.669

190,000--

190,000

1,734

-

-

1,734

0.669

166,000--

166,000

1,515

-

-

1,515

0.669

166,000--

166,000

1,515

-

-

1,515

0.669

500,000--

500,000

4,563

-

-

4,563

0.669

1,250,000--

1,250,000

11,409--11,4090.769

1,065,000--

1,065,000

9,720

-

-

9,720

0.769

1,250,000--

1,250,000

11,409--11,4090.769

1,250,000--

1,250,000

11,409--11,4090.869

1,060,000--

1,060,000

9,675

-

-

9,675

0.869

1,250,000--

1,250,000

11,409--11,4090.869

1,850,000-

1,850,000-

16,885-

16,885-0.327

1,850,000-

1,850,000-

16,885-

16,885-0.327

1,000,000--

1,000,000

9,127

-

-

9,127

0.750

MUFG
Bank, Ltd.

500,000--

500,000

4,563

-

-

4,563

0.750

MizuhoBank, Ltd.

2,442,000--

2,442,000

22,289--22,2890.369

MizuhoBank, Ltd.
Sumitomo
Mitsui
Trust
Bank,
LimitedSumitomo
Mitsui
Banking
CorporationMizuhoBank, Ltd.
Sumitomo
Mitsui
Banking
CorporationShinseiBank,
Limited.

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

13-Oct-22

13-Oct-22

13-Oct-22

13-Oct-22

13-Oct-22

13-Oct-22

13-Oct-22

13-Oct-22

13-Oct-22

13-Oct-23

13-Oct-23

13-Oct-23

11-Oct-24

11-Oct-24

11-Oct-24

13-Oct-19

13-Oct-19

27-Jun-23

27-Jun-23

17-Jul-21

21Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)

MUFG
Bank, Ltd.

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

2,220,000--

2,220,000

20,262--

20,2620.369

1,998,000--

1,998,000

18,236--

18,2360.369

1,110,000--

1,110,000

10,131--

10,1310.369

1,000,000--

1,000,000

9,127

-

-

9,127

0.369

890,000--

890,000

8,123

-

-

8,123

0.369

MizuhoBank, Ltd.

2,443,000--

2,443,000

22,298--22,2980.469

MUFG
Bank, Ltd.

2,220,000--

2,220,000

20,262--

20,262

0.469

1,997,000--

1,997,000

18,227--

18,2270.469

1,110,000--

1,110,000

10,131--

10,1310.469

1,000,000--

1,000,000

9,127

-

-

9,127

0.469

Sumitomo
Mitsui
Banking
CorporationShinseiBank,
Limited.
Citibank,
N.A.,
Japan
Branches
Sumitomo
Mitsui
Trust
Bank,
LimitedSumitomo
Mitsui
Banking
CorporationShinseiBank,
Limited.

Long-term
loans
payableIncrease

Citibank,
N.A.,
Japan
Branches
Sumitomo
Mitsui
Trust
Bank,
Limited

890,000--

890,000

8,123

-

-

8,123

0.469

MizuhoBank, Ltd.

2,442,000--

2,442,000

22,289--22,2890.569

MUFG
Bank, Ltd.

2,220,000--

2,220,000

20,262--

20,262

0.569

1,997,000--

1,997,000

18,227--

18,2270.569

1,110,000--

1,110,000

10,131--

10,1310.569

1,000,000--

1,000,000

9,127

-

-

9,127

0.569

890,000--

890,000

8,123

-

-

8,123

0.569

766,000--

766,000

6,991

-

-

6,991

0.369

766,000--

766,000

6,991

-

-

6,991

0.369

467,000--

467,000

4,262

-

-

4,262

0.369

Sumitomo
Mitsui
Banking
CorporationShinseiBank,
Limited.
Citibank,
N.A.,
Japan
Branches
Sumitomo
Mitsui
Trust
Bank,
LimitedMizuhoBank, Ltd.
Sumitomo
Mitsui
Banking
Corporation
MUFG
Bank, Ltd.

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

17-Jul-21

17-Jul-21

17-Jul-21

17-Jul-21

17-Jul-21

17-Jul-22

17-Jul-22

17-Jul-22

17-Jul-22

17-Jul-22

17-Jul-22

14-Jul-23

14-Jul-23

14-Jul-23

14-Jul-23

14-Jul-23

14-Jul-23

02-Aug-21

02-Aug-21

02-Aug-21

22

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)
ShinseiBank,
Limited.

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

150,000--

150,000

1,369

-

-

1,369

0.369

120,000--

120,000

1,095

-

-

1,095

0.369

30,000--30,000

273

-

-

273

0.369

AEON
Bank, Ltd.

60,000--60,000

547

-

-

547

0.369

MizuhoBank, Ltd.

2,521,500--

2,521,500

23,014--23,0140.369

2,521,500--

2,521,500

23,014--23,0140.369

2,133,000--

2,133,000

19,468--19,4680.369

1,000,000--

1,000,000

9,127

-

-

9,127

0.369

684,000--

684,000

6,243

-

-

6,243

0.369

546,000--

546,000

4,983

-

-

4,983

0.369

Citibank,
N.A.,
Japan
Branches
The
NomuraTrust andBankingCo., Ltd.

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

Long-term
loans
payableIncrease

Citibank,
N.A.,
Japan
Branches
Developm
ent Bankof JapanInc.

500,000--

500,000

4,563

-

-

4,563

0.369

445,000--

445,000

4,061

-

-

4,061

0.369

137,000--

137,000

1,250

-

-

1,250

0.369

AEON
Bank, Ltd.

273,000--

273,000

2,491

-

-

2,491

0.369

MizuhoBank, Ltd.

3,287,000--

3,287,000

30,001--

30,001

0.469

3,287,000--

3,287,000

30,001--

30,0010.469

2,600,000--

2,600,000

23,731--

23,7310.469

1,000,000--

1,000,000

9,127

-

-

9,127

0.469

833,000--

833,000

7,603

-

-

7,603

0.469

667,000--

667,000

6,087

-

-

6,087

0.469

ResonaBank,
Limited.
The
NomuraTrust andBankingCo., Ltd.

Sumitomo
Mitsui
Banking
Corporation
MUFG
Bank, Ltd.
Sumitomo
Mitsui
Trust
Bank,
LimitedShinseiBank,
Limited.
Citibank,
N.A.,
Japan
Branches

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

02-Aug-21

02-Aug-21

02-Aug-21

02-Aug-21

26-Sep-21

26-Sep-21

26-Sep-21

26-Sep-21

26-Sep-21

26-Sep-21

26-Sep-21

26-Sep-21

26-Sep-21

26-Sep-21

26-Sep-22

26-Sep-22

26-Sep-22

26-Sep-22

26-Sep-22

26-Sep-22

23

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)
Developm
ent Bankof Japan
Inc.

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

500,000--

500,000

4,563

-

-

4,563

0.469

445,000--

445,000

4,061

-

-

4,061

0.469

167,000--

167,000

1,524

-

-

1,524

0.469

AEON
Bank, Ltd.

334,000--

334,000

3,048

-

-

3,048

0.469

MizuhoBank, Ltd.

3,287,500--

3,287,500

30,006--30,0060.569

3,287,500--

3,287,500

30,006--30,0060.569

2,600,000--

2,600,000

23,731--

23,7310.569

1,000,000--

1,000,000

9,127

-

-

9,127

0.569

833,000--

833,000

7,603

-

-

7,603

0.569

667,000--

667,000

6,087

-

-

6,087

0.569

ResonaBank,
Limited.
The
NomuraTrust andBankingCo., Ltd.

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

Long-term
loans
payableIncrease

Citibank,
N.A.,
Japan
Branches
Developm
ent Bankof Japan
Inc.

-

-

500,000

4,563

-

-

4,563

0.569

445,000--

445,000

4,061

-

-

4,061

0.569

166,000--

166,000

1,515

-

-

1,515

0.569

AEON
Bank, Ltd.

333,000--

333,000

3,039

-

-

3,039

0.569

MUFG
Bank, Ltd.

850,000--

850,000

7,758

-

-

7,758

0.373

3,400,000--

3,400,000

31,033--31,0330.373

MizuhoBank, Ltd.

386,000--

386,000

3,523

-

-

3,523

0.361

MUFG
Bank, Ltd.

1,275,000--

1,275,000

11,637--

11,6370.361

2,100,000--

2,100,000

19,167--

19,1670.361

500,000--

500,000

4,563

-

-

4,563

0.361

The
NomuraTrust andBankingCo., Ltd.

Sumitomo
Mitsui
Trust
Bank,
LimitedSumitomo
Mitsui
Trust
Bank,
LimitedShinseiBank,
Limited.

Use ofproceeds

Remarks

26-Sep-22

26-Sep-22

26-Sep-22

26-Sep-22

26-Sep-23

26-Sep-23

26-Sep-23

26-Sep-23

26-Sep-23

26-Sep-23(2)500,000

ResonaBank,
Limited.

Maturity
date

Unsecured
andunguaranteed26-Sep-23

26-Sep-23

26-Sep-23

26-Sep-23

22-Jan-22

22-Jan-22

29-Mar-22

29-Mar-22

29-Mar-22

29-Mar-22

24

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance

Increase(in thousands of yen)
ResonaBank,
Limited.
Developm
ent Bankof JapanInc.
The Bankof
Fukuoka,Ltd.
The
Shizuoka
Bank, Ltd.
The
NomuraTrust andBankingCo., Ltd.
The
SenshuIkeda
Bank, Ltd.
AozoraBank, Ltd.
THE
NISHI-NI
PPON
CITY
BANK,
LTD.
The
TochigiBank, Ltd.

Long-term
loans
payableKiraboshi
Bank, Ltd.
Citibank,
N.A.,
Japan
BranchesEndingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

500,000--

500,000

4,563

-

-

4,563

0.361

1,000,000--

1,000,000

9,127

-

-

9,127

0.361

333,000--

333,000

3,039

-

-

3,039

0.361

1,270,000--

1,270,000

11,591--

11,5910.361

270,000--

270,000

2,464

-

-

2,464

0.361

300,000--

300,000

2,738

-

-

2,738

0.361

1,000,000--

1,000,000

9,127

-

-

9,127

0.594

1,000,000--

1,000,000

9,127

-

-

9,127

0.594

500,000--

500,000

4,563

-

-

4,563

0.594

1,000,000--

1,000,000

9,127

-

-

9,127

0.869

1,000,000--

1,000,000

9,127

-

-

9,127

0.340

1,000,000--

1,000,000

9,127

-

-

9,127

0.334

MizuhoBank, Ltd.

-571,400-

571,400

-

5,215

-

5,215

0.400

MUFG
Bank, Ltd.

-1,464,800-

1,464,800-

13,369-13,3690.400-

1,331,200-

1,331,200-

12,150-12,1500.400-

628,600-

628,600

-

5,737

-

5,737

0.400

-

1,000,000-

1,000,000

-

9,127

-

9,127

0.400

-

200,000-

200,000

-

1,825

-

1,825

0.400

-

600,000-

600,000

-

5,476

-

5,476

0.400

-

571,400-

571,400

-

5,215

-

5,215

0.499

Developm
ent Bankof Japan
Inc.

Sumitomo
Mitsui
Banking
CorporationSumitomo
Mitsui
Trust
Bank,
Limited
Citibank,
N.A.,
Japan
Branches
ShinseiBank,
Limited.
ResonaBank,
Limited.

MizuhoBank, Ltd.

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

29-Mar-22

29-Mar-22

29-Mar-22

29-Mar-22

29-Mar-22

29-Mar-22

29-Mar-24

29-Mar-24

29-Mar-24

29-Mar-29

17-Jun-22

17-Jun-22

16-Jan-23

16-Jan-23

16-Jan-23

16-Jan-23

16-Jan-23

16-Jan-23

16-Jan-23

16-Jan-24

25

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance

Increase(in thousands of yen)

MUFG
Bank, Ltd.

(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)-

1,464,800-

1,464,800-

13,369-13,3690.499-

1,331,200-

1,331,200-

12,150-12,1500.499-

628,600-

628,600

-

5,737

-

5,737

0.499

-

1,000,000-

1,000,000

-

9,127

-

9,127

0.499

-

200,000-

200,000

-

1,825

-

1,825

0.499

-

600,000-

600,000

-

5,476

-

5,476

0.499

MizuhoBank, Ltd.

-

1,171,400-

1,171,400-

10,691-

10,691

0.563

MUFG
Bank, Ltd.

-1,464,800-

1,464,800-

13,369-13,3690.563-

1,331,200-

1,331,200-

12,150-12,1500.563-

628,600-

628,600

-

5,737

-

5,737

0.563

Sumitomo
Mitsui
Banking
CorporationSumitomo
Mitsui
Trust
Bank,
Limited
Citibank,
N.A.,
Japan
Branches
ShinseiBank,
Limited.
ResonaBank,
Limited.

Long-term
loans
payableEndingbalance

Decrease

Sumitomo
Mitsui
Banking
CorporationSumitomo
Mitsui
Trust
Bank,
Limited
Citibank,
N.A.,
Japan
Branches-

1,000,000-

1,000,000

-

9,127

-

9,127

0.563

-

200,000-

200,000

-

1,825

-

1,825

0.563

MizuhoBank, Ltd.

-

2,171,400-

2,171,400-

19,819-19,8190.619

MUFG
Bank, Ltd.

-1,464,800-

1,464,800-

13,369-13,3690.619-

1,331,200-

1,331,200-

12,150-12,1500.619-

628,600-

628,600

-

5,737

-

5,737

0.619

-

200,000-

200,000

-

1,825

-

1,825

0.619

MizuhoBank, Ltd.

-

2,170,400-

2,170,400-

19,810-19,8100.769

MUFG
Bank, Ltd.

-1,464,800-

1,464,800-

13,369-13,3690.769-

1,331,200-

1,331,200-

12,150-12,1500.769

ShinseiBank,
Limited.

Sumitomo
Mitsui
Banking
CorporationSumitomo
Mitsui
Trust
Bank,
LimitedShinseiBank,
Limited.

Sumitomo
Mitsui
Banking
CorporationMaturitydate

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

16-Jan-24

16-Jan-24

16-Jan-24

16-Jan-24

16-Jan-24

16-Jan-24

16-Jul-24

16-Jul-24

16-Jul-24

16-Jul-24

16-Jul-24

16-Jul-24

16-Jan-25

16-Jan-25

16-Jan-25

16-Jan-25

16-Jan-25

16-Jul-25

16-Jul-25

16-Jul-25

26

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance

Increase(in thousands of yen)
Sumitomo
Mitsui
Trust
Bank,
Limited(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)-

628,600-

628,600

-

5,737

-

5,737

0.769

-

200,000-

200,000

-

1,825

-

1,825

0.769

MizuhoBank, Ltd.

-1,085,000-

1,085,000

-

9,903

-

9,903

0.413

MUFG
Bank, Ltd.

-

987,000-

987,000

-

9,008

-

9,008

0.413

-

987,000-

987,000

-

9,008

-

9,008

0.413

-

684,000-

684,000

-

6,243

-

6,243

0.413

-

500,000-

500,000

-

4,563

-

4,563

0.413

-

300,000-

300,000

-

2,738

-

2,738

0.413

-

300,000-

300,000

-

2,738

-

2,738

0.413

-

100,000-

100,000

-

912

-

912

0.413

ShinseiBank,
Limited.

Sumitomo
Mitsui
Banking
CorporationSumitomo
Mitsui
Trust
Bank,
Limited
Citibank,
N.A.,
Japan
Branches
Developm
ent Bankof JapanInc.
AEON
Bank, Ltd.

Long-term
loans
payableEndingbalance

Decrease

The
NomuraTrust andBankingCo., Ltd.
MizuhoBank, Ltd.

-

712,000-

712,000

-

6,498

-

6,498

0.525

MUFG
Bank, Ltd.

-

986,000-

986,000

-

8,999

-

8,999

0.525

-

986,000-

986,000

-

8,999

-

8,999

0.525

-

684,000-

684,000

-

6,243

-

6,243

0.525

-

500,000-

500,000

-

4,563

-

4,563

0.525

-

300,000-

300,000

-

2,738

-

2,738

0.525

-

300,000-

300,000

-

2,738

-

2,738

0.525

-

100,000-

100,000

-

912

-

912

0.525

AozoraBank, Ltd.

-375,000-

375,000

-

3,422

-

3,422

0.525

MizuhoBank, Ltd.

-

712,000-

712,000

-

6,498

-

6,498

0.580

Sumitomo
Mitsui
Banking
CorporationSumitomo
Mitsui
Trust
Bank,
Limited
Citibank,
N.A.,
Japan
Branches
Developm
ent Bankof JapanInc.
AEON
Bank, Ltd.
The
NomuraTrust andBankingCo., Ltd.

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

16-Jul-25

16-Jul-25

16-Jan-23

16-Jan-23

16-Jan-23

16-Jan-23

16-Jan-23

16-Jan-23

16-Jan-23

16-Jan-23

16-Jan-24

16-Jan-24

16-Jan-24

16-Jan-24

16-Jan-24

16-Jan-24

16-Jan-24

16-Jan-24

16-Jan-24

16-Jul-24

27

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance

Increase(in thousands of yen)

MUFG
Bank, Ltd.

(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)-

986,000-

986,000

-

8,999

-

8,999

0.580

-

986,000-

986,000

-

8,999

-

8,999

0.580

-

684,000-

684,000

-

6,243

-

6,243

0.580

-

500,000-

500,000

-

4,563

-

4,563

0.580

-

300,000-

300,000

-

2,738

-

2,738

0.580

-

300,000-

300,000

-

2,738

-

2,738

0.580

-

100,000-

100,000

-

912

-

912

0.580

AozoraBank, Ltd.

-375,000-

375,000

-

3,422

-

3,422

0.580

MizuhoBank, Ltd.

-

1,212,000-

1,212,000-

11,062-

11,062

0.619

MUFG
Bank, Ltd.

-

986,000-

986,000

-

8,999

-

8,999

0.619

Sumitomo
Mitsui
Banking
CorporationSumitomo
Mitsui
Trust
Bank,
Limited
Citibank,
N.A.,
Japan
Branches
Developm
ent Bankof JapanInc.
AEON
Bank, Ltd.
The
NomuraTrust andBankingCo., Ltd.

Long-term
loans
payableEndingbalance

Decrease

Sumitomo
Mitsui
Banking
CorporationSumitomo
Mitsui
Trust
Bank,
Limited

-986,000-

986,000

-

8,999

-

8,999

0.619

-

684,000-

684,000

-

6,243

-

6,243

0.619

-

300,000-

300,000

-

2,738

-

2,738

0.619

-

300,000-

300,000

-

2,738

-

2,738

0.619

-

100,000-

100,000

-

912

-

912

0.619

AozoraBank, Ltd.

-375,000-

375,000

-

3,422

-

3,422

0.619

MizuhoBank, Ltd.

-

1,211,000-

1,211,000-

11,053-

11,0530.769

MUFG
Bank, Ltd.

-

986,000-

986,000

-

8,999

-

8,999

0.769

-

986,000-

986,000

-

8,999

-

8,999

0.769

-

684,000-

684,000

-

6,243

-

6,243

0.769

Developm
ent Bankof JapanInc.
AEON
Bank, Ltd.
The
NomuraTrust andBankingCo., Ltd.

Sumitomo
Mitsui
Banking
CorporationSumitomo
Mitsui
Trust
Bank,
LimitedMaturitydate

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

16-Jul-24

16-Jul-24

16-Jul-24

16-Jul-24

16-Jul-24

16-Jul-24

16-Jul-24

16-Jul-24

16-Jan-25

16-Jan-25

16-Jan-25

16-Jan-25

16-Jan-25

16-Jan-25

16-Jan-25

16-Jan-25

16-Jul-25

16-Jul-25

16-Jul-25

16-Jul-25

28

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance

Increase(in thousands of yen)
Developm
ent Bankof JapanInc.
AEON
Bank, Ltd.
The
NomuraTrust andBankingCo., Ltd.
AozoraBank, Ltd.

The Tokyo
Star Bank,
LimitedLong-term
loans
payableMizuhoBank, Ltd.

The
DaisanBank, Ltd.
The
DaisanBank, Ltd.
The
DaisanBank, Ltd.
THE
NISHI-NI
PPON
CITY
BANK,
LTD.
Total
long-term
loans
payableTotal loans payable

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)-

300,000-

300,000

-

2,738

-

2,738

0.769

-

300,000-

300,000

-

2,738

-

2,738

0.769

-

100,000-

100,000

-

912

-

912

0.769

-

375,000-

375,000

-

3,422

-

3,422

0.769

-

700,000-

700,000

-

6,389

-

6,389

0.769

-

2,882,000-

2,882,000-

26,305-26,3050.462-

800,000-

800,000

-

7,301

-

7,301

0.462

-

1,700,000-

1,700,000-

15,516-

15,5160.486-

1,000,000-

1,000,000

-

9,127

-

9,127

0.619

-

1,000,000-

1,000,000

-

9,127

-

9,127

0.769

224,774,000

62,775,000

38,061,000

249,488,000

2,051,606

572,973

347,398

2,277,181

224,774,000

65,461,000

38,061,000

252,174,000

2,051,606

597,489

347,398

2,301,697-

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

16-Jul-25

16-Jul-25

16-Jul-25

16-Jul-25

16-Jul-25

16-Jan-24

16-Jan-24

15-Apr-24

15-Apr-25

15-Oct-25---

Notes:(1)

The average interest rate is weighted by the balance of each borrowing at the end of the period and rounded to three decimal places.

(2)

The funds are mainly used to acquire properties in trust and for repayment of loans payable.

(3)Long-term loans payable include current portion.

(4)

A loan payable of 1,000,000 thousand yen has been transferred from The Tokyo Star Bank, Limited to The Towa Bank, Ltd on December 25, 2019.

(5)

Repayment schedule of long-term loans payable (except for the current portion) for the next five years after each balance sheet date are as follows:

As of
December 31,
2019

December 31,
2019(in thousands of
U.S. dollars)(in thousands of yen)
1-2 years·······························································¥

55,601,000$

507,4932-3 years··················································································

47,079,000

429,709

3-4 years··················································································

38,582,000

352,154

4-5 years··················································································

32,920,000

300,474

10. Net Assets
The Company issues only non-par value units in accordance with the Investment Trust Act, and the entire amount of the issue price of
new investment units is allocated to unitholders’ capital within net assets. The Company is required to maintain net assets of at least¥50,000 thousand (US$456 thousand) as required by Article 67-4 of the Investment Trust Act.

29

The number of investment units authorized was 10,000,000 units as of June 30, 2019 and December 31, 2019.
The number of investment units issued and outstanding were 5,666,840 units and 6,096,840 units as of June 30, 2019 and December 31,
2019 respectively.

11.Appropriation of Retained Earnings
In accordance with the distribution policy in Article 17, Paragraph 1, of the Company’s articles of incorporation which stipulates making
distributions in excess of 90% of distributable profit as defined in Article 67-15, Paragraph 1 of the Special Taxation Measures Act of Japanfor the fiscal period.
The following table shows the appropriation of retained earnings for the six months ended June 30, 2019 and December 31, 2019.
For the six months ended

June 30,2019

December 31,
2019

December 31,
2019(in thousands of
U.S. dollars)(in thousands of yen)
Unappropriated retained earnings ····································································· ¥21,131,966¥

23,261,426$

212,316

Reversal of allowance for temporary differences adjustment·······················(125,201)--

Distributions ···············································································································(9,384,287)(10,517,049)(95,993)

Retained earnings / losses carried forward························································· ¥11,622,477¥

12,744,377$

116,323

The distribution in respect of the six months ended December 31, 2019 of ¥1,725 (US$15.7) per investment unit, amounting to a total
distribution of ¥10,517,049thousand (US$95,993 thousand) was proposed and approved at the Board of Directors meeting on February
20, 2019. These financial statements do not reflect these distributions payable.
Cash distributions per investment unit were ¥1,656 and ¥1,725 (US$15.7) for the six months ended June 30, 2019, and December 31, 2019,respectively.
Notes related to provision and reversal of allowance for temporary differences adjustment is below.
For the six months ended June 30, 2019
In this table, the Company reversed allowance for temporary differences adjustment below.
(a) Reasons, related assets and allowance(in thousands of yen)
Related assets, etc.

Leasehold rights in trust

Allowance for temporary difference adjustments

Reason for reversal

Sale of leasehold in trust(125,201)(b) Method of reversal
Method of reversal

Related assets, etc.

Leasehold rights in trust

Upon sale, the corresponding amount is scheduled to be reversed.

For the six months ended December 31, 2019
Not Applicable

12. Rent Revenues － Real Estate and Expenses Related to Property Rental Business
Rent revenue – real estate and expenses related to property rental business for the six months ended June 30, 2019 and December 31,
2019 consist of the following:
For the six months ended

June 30,2019

December 31,
2019(in thousands of yen)

December 31,
2019(in thousands of
U.S. dollars)

30

Rental revenue – real estate:
Rental revenue and common area charges (*)················································ ¥Other ·························································································································
Total rental revenue – real estate ······································································ ¥11,795,812
357,587
12,153,399¥

Expenses related to property rental business:
Facility management fees ··················································································· ¥Property related taxes ··························································································
Insurance expense ································································································
Depreciation ···········································································································
Other ·························································································································
Total expenses related to property rental business ····································· ¥Operating income from property leasing activities······································ ¥662,160
565,715
13,723
3,048,495
200,561
4,490,658
7,662,741¥(*)Variable rental revenue of hotels····································································· ¥4,304,181

14,306,734
239,092
14,545,826

$

$

¥
¥

539,778
631,040
17,6393,345,473
139,076
4,673,007
9,872,819

$
$

4,926
5,759
161
30,535
1,269
42,652
90,113¥

5,317,963$

48,539¥$130,583
2,182
132,765

13. Management Contract Revenue
For the six months ended

June 30,2019

December 31,
2019

December 31,
2019(in thousands of
U.S. dollars)(in thousands of yen)Management contract revenue:
Hotel management revenue················································································
Hotel management expenses ···········································································
Management contract revenue ········································································

¥

¥

¥

1,406,749
826,160
580,588

Management contract expenses:
Management fee ···································································································· ¥Insurance expense ····························································································
Depreciation ···········································································································
Other ·························································································································
Total management contract expenses ····························································· ¥Operating income from management contract ············································· ¥3,490
36,279
119,824
4,782
164,376
416,211¥¥¥¥3,927,961
2,530,339
1,397,621$

12,276111,278
412,305
1,680
537,542860,079$$$$

35,85223,09512,756

112
1,015
3,763
15
4,906
7,850

14. Breakdown of Gain on sales of Properties
For the six months ended June 30, 2019
Royal Parks
Tower
Minami-Senju(in thousands of yen)
12,209,814¥
27,745,250
6,422,775
21,923,169
153,225
337,910
5,633,813¥
5,484,169

Spacia Ebisu

Revenue from sales of properties ···································································· ¥Cost of properties sold ·························································································
Other sale-related costs ·······················································································
Gain or loss on sales of properties ··································································· ¥For the six months ended December 31, 2019

Winbell Kagurazaka(in thousands of yen)
Revenue from sales of properties ···································································· ¥Cost of properties sold ·························································································
Other sale-related costs ·······················································································
Gain or loss on sales of properties ··································································· ¥5,135,530
2,992,380
172,843
1,970,306(in thousands of
U.S. dollars)$
46,87427,312
1,577$
17,98331

15. Income Taxes
The Company is subject to corporate income taxes in Japan. The Company may deduct from its taxable income the amounts distributed
to its unitholders, provided the requirements are met under the Special Taxation Measures Act of Japan. Under this act, the Company
must meet a number of tax requirements, including a requirement to distribute in excess of 90% of distributable profit for the fiscal
period in order to be able to deduct such amounts. If the Company does not satisfy all of the requirements, the entire taxable income of
the Company will be subject to regular corporate income taxes in Japan.
The Company has a policy of making distributions in excess of 90% of its distributable profit for the fiscal period to qualify for conditions
set forth in the Special Taxation Measures Act of Japan to achieve a deduction of distributions for income tax purpose and it distributes
approximately 100% of distributable profit. Hence, the Company has treated the distributions as a tax allowable deduction as defined in
the Special Taxation Measures Act of Japan.
(a) Reconciliations of the Company’s effective tax rates and statutory tax rates are as follows:
For the six months ended

June 30,2019

December 31,
2019(Rate)

Statutory tax rates ··············································································31.51 %Deductible cash distributions ······················································· Increase (decrease) in valuation allowance ·······························(31.58)Change of tax rates(0.05)
Other ····································································································· 0.12

31.51 %
(28.47)(3.03)
0.00

Effective tax rates ··············································································· 0.00 %0.01 %(b) Deferred tax assets and liabilities consist of the following:
As ofJune 30,2019

December 31,
2019

December 31,
2019(in thousands of
U.S. dollars)(in thousands of yen)
Deferred tax assets:
Enterprise tax payable
Allowance for doubtful accounts ·····················
Buildings and other (merger) ······························
Land (merger)···························································Net loss carried forward(*1) ·······························
Asset retirement obligations ······························
Fixed-term leasehold ············································
Adjustment of acquisition price (Overseas properties)
Deposits received

46
428,965
786,792
747,198
10,16876,182477,213-821
375,803695,171
522,444
10,23788,526472,363
9,301

Subtotal - deferred tax assets ··································
Valuation allowance for tax loss carried forward
Valuation allowance for the sum of deductible temporary differences

2,527,862(747,198)(1,743,389)

2,174,669(522,444)(1,652,225)

19,849(4,768)(15,080)

Subtotal - valuation allowance(*2) ························(2,490,588)(2,174,669)(19,849)

Total - deferred tax assets···········································

37,274--

Deferred tax liabilities:
Asset retirement obligations ······························
Deferred gains or losses on hedges····················

9,711
27,562--¥

Total - deferred tax liabilities
Net deferred tax assets ·············································

1,294

¥

37,274
¥

-

$

¥

-

7
3,430
6,345
4,768
93
808
4,311
84

$

-

(*1)The amounts of tax loss carried forward and the deferred tax assets are indicated by carry-forward period.
For the six months ended June 30, 201932

Within 1 year

1-2 years

2-3 years

3-4 years

4-5 years

Over 5 years

Total(in thousands of yen)Tax loss carried forward (a)-78,982-

668,215--

747,198

Valuation allowance ········································································(78,982)-(668,215)--(747,198)

Deferred tax assets ··············································································
-

-

-

-

-

-

-

(a)Tax loss carried forward shown in the above table is after multiplying the statutory tax rate.
For the six months ended December 31, 2019

Within 1 year

1-2 years

2-3 years

3-4 years

4-5 years

Over 5 years

Total(in thousands of yen)Tax loss carried forward (a)--201,976

320,467--

522,444

Valuation allowance ········································································--(201,976)(320,467)--(522,444)

Deferred tax assets ··············································································
-

-

-

-

-

-

-

Within 1 year

1-2 years

2-3 years

3-4 years

4-5 years

Over 5 years

Total(in thousands of U.S. dollars)
Tax loss carried forward (a)Valuation allowance ········································································
Deferred tax assets ··············································································
-

-

1,843
(1,843)

2,925(2,925)

-

-

-

4,768
(4,768)--(a) Tax loss carried forward shown in the above table is after multiplying the statutory tax rate.

16. Leases(a) Lease rental revenues
The future minimum rental revenues pursuant to existing rental contracts as of June 30, 2019 and December 31, 2019 scheduled to bereceived are summarized as follows:
As ofJune 30,2019

December 31,
2019

December 31,
2019

Due within one year ································¥
9,754,753
Due over one year ···································· 58,695,396¥

12,306,447
76,858,696(in thousands of
U.S. dollars)$
112,326
701,521

Total ······························································¥
68,450,150¥

89,165,143$(in thousands of yen)

813,847(b) Lease rental expenses
The future minimum rental expenses pursuant to existing rental contracts as of June 30, 2019 and December 31, 2019 scheduled to be
paid are summarized as follows:
As ofJune 30,2019

December 31,
2019

December 31,
2019(in thousands of
U.S. dollars)(in thousands of yen)
Due within one year ································¥
268,487
Due over one year ···································· 7,824,534¥

268,487
7,690,291$

2,450
70,192

Total ······························································¥
8,093,022¥

7,958,778$

72,643

17. Financial Instruments(a) Qualitative information for financial instruments

33

(i) Policy for financial instrument transactions
The Company raises funds through loans payable , investment corporation bonds, and the issuance of investment units toacquire real estate properties, pay property maintenance expenses and/or repay existing loans payable. Surplus funds aremanaged carefully through investments in financial instruments taking into account liquidity and safety in light of the current
financial market conditions. Derivative instruments are used only for hedging purposes and not for speculation.
(ii) Nature and extent of risks arising from financial instruments and risk management
The funds raised through loans payable and investment corporation bonds are mainly used to acquire real estate properties orproperties in trust and for the repayment of existing loans payable. Liquidity risks relating to loans payable are managed by thefinance department of the Asset Manager by preparing monthly plans for funds, and monitoring the covenants defined in loan
agreements.
(iii) Supplemental information for financial instruments
The fair value of financial instruments is based on quoted market prices if available. When quoted market prices are notavailable, fair value is estimated using valuation techniques which contain various assumptions. If other valuation models orassumptions were used, the estimated value may differ.
(b) Quantitative information for financial instruments
The following table shows the carrying amounts, fair values and valuation differences of financial instruments for which fairvalue is available as of June 30, 2019 and December 31, 2019.
As ofJune 30,
2019
Carrying
amounts

December 31,
2019

Fair value

Carrying
amounts

Difference

December 31,
2019

Fair value

Carrying
amounts

Difference(in thousands of yen)

Fair value

Difference(in thousands of U.S. dollars)

Assets:Current:(1) Cash and bank deposits ···················································¥
48,833,358¥(2) Cash and bank deposits in trust. ··································
6,766,348
Total assets ··················································································¥
55,599,707

48,833,358¥-

6,766,348¥

55,599,707

¥

¥

-

17,924,733¥

10,862,669¥

28,787,403

17,924,733¥

10,862,669¥

28,787,403

-

$

¥

-

163,606$

99,148$262,754

163,606$-

99,148$262,754$-

Liabilities:(3) Short-term loans payable ················································ ---2,686,000

2,686,000-

24,516

24,516-(4) Current portion of long-term loans
51,744,000
payable ·························································································

51,744,000-

50,130,000

50,130,000-

457,557

457,557-(5) Investment corporation bonds ······································
4,000,000

4,005,300

5,300

7,000,000

6,957,300(42,700)

63,891

63,502(389)(6) Long-term loans payable···················································
173,030,000

173,030,000-

199,358,000

199,358,000-

1,819,623

1,819,623-

Total liabilities ·············································································¥
228,774,000¥

228,779,300

¥

5,300

¥

259,174,000¥

259,131,300¥(42,700)$

2,365,589$

2,365,199

$

(389)

(7) Derivatives···············································································¥
179,861¥

179,861¥-¥

129,227¥

129,227

¥

-

$

1,179

$

1,179

$

-

Notes

(i)The methods and assumptions used to estimate fair value are as follows:(1)Cash and bank deposits and(2)Cash and bank deposits in trust(3)Short-term loans payable
Because of their short maturities, the carrying amounts approximate their fair value.
(4)Current portion of long-term loans payable(6)Long-term loans payable
Long-term loans payable with floating interest rates reflecting changes in market rates within a short term period are stated at their carrying amounts as their carrying
amounts approximate their fair values.
(5)Investment corporation bonds
The fair values of investment corporate bonds are determined based on the present value of contractual cash flows discounted at current market interest rates which would
be applicable to new investment corporate bonds under the same conditions and terms.
(7)Derivatives
Please refer to the “19. Derivatives” below.

(ii) Financial instruments for which fair value is difficult to determine are as follows:
As ofJune 30,

December 31,

December 31,

34

2019

2019

2019
(in thousands of
U.S. dollars)(in thousands of yen)
Tenant leasehold and security deposits in trust ······················¥

1,746,941¥

1,765,094$

16,110Investment securities ·······································································¥

17,856,387¥

17,856,387$

162,982

Tenant leasehold and security deposits are not publicly traded, and it is difficult to determine their fair value based on estimated future cash flows because the repayment datesof those deposits are not certain. Therefore, these financial instruments are not included in the above quantitative information.
Fair values of preferred securities are not subject to disclosure of fair value as they have no market value and their fair values are extremely difficult to recognize.

(iii) Cash flow schedule of financial assets after the balance sheet dateWithin 1 year

1-2 years

2-3 years

3-4 years

4-5 years

Over 5 years(in thousands of yen)
As of June 30, 2019:
Cash and bank deposits ··································································¥ 48,833,358
Cash and bank deposits in trust ···················································
6,766,348

¥

-

¥

-

¥

-

¥

-

¥

-

Total ·······································································································¥ 55,599,707

¥

-

¥

-

¥

-

¥

-

¥

-

As of December 31, 2019:
Cash and bank deposits ··································································¥ 17,924,733
10,862,669
Cash and bank deposits in trust ···················································

¥

-

¥

-

¥

-

¥

-

¥

-

Total ·······································································································¥ 28,787,403

¥

-

¥

-

¥

-

¥

-

¥

-

Within 1 year

1-2 years

2-3 years

3-4 years

4-5 years

Over 5 years(in thousands of U.S. dollars)
As of December 31, 2019:
163,606
Cash and bank deposits ··································································$
99,148Cash and bank deposits in trust ···················································

$

-

$

-

$

-

$

-

$

-

262,754
Total ·······································································································
$

$

-

$

-

$

-

$

-

$

-

(iv) Cash flow schedule of financial liabilities after the balance sheet dateWithin 1 year

1-2 years

2-3 years

3-4 years

4-5 years

Over 5 years(in thousands of yen)
As of June 30, 2019:
Short-term loans payable ······························································· Current portion of long-term loans payable ····························
51,744,000
Investment corporation bonds ······················································· Long-term loans payable ································································ Total ·······································································································¥ 51,744,000

57,380,000¥

57,380,000

52,602,000¥

52,602,000

1,000,000
29,645,000¥

30,645,000

2,000,000
28,843,000¥

30,843,000

1,000,000
4,560,000¥

5,560,000

As of December 31, 2019:
Short-term loans payable ·······························································
2,686,000--

Current portion of long-term loans payable ····························
50,130,000

-

-

-

-

-

Investment corporation bonds ······················································· ---3,000,000

1,000,000

3,000,000

Long-term loans payable ································································ Total ·······································································································¥ 52,816,000

Within 1 year

55,601,000¥

55,601,000

1-2 years-

47,079,000¥

47,079,000

2-3 years-

38,582,000¥

41,582,000

3-4 years-

32,920,000¥

33,920,000

4-5 years

25,176,000¥

28,176,000

Over 5 years(in thousands of U.S. dollars)
As of December 31, 2019:
Short-term loans payable ·······························································
24,516

-

-

-

-

-

Current portion of long-term loans payable ····························
457,557

-

-

-

-

-

Investment corporation bonds ······················································· ---27,382

9,127

27,382Long-term loans payable ································································ -507,493429,709352,154

300,474

229,79135

Total ·······································································································$
482,073$

507,493$429,709$379,536$

309,602$257,174

18. Investment securities
As of June 30, 2019
Fair values of preferred securities recorded on the Balance Sheet at ¥17,856,387 thousand are not subject to disclosure of fair value as they
have no market value and their fair values are extremely difficult to recognize.
As of December 31, 2019
Fair values of preferred securities recorded on the Balance Sheet at ¥17,856,387 thousand (US$162,982 thousand) are not subject todisclosure of fair value as they have no market value and their fair values are extremely difficult to recognize.

19. Derivatives
Information on derivative transactions undertaken by the Company as of June 30, 2019 and December 31, 2019 is as follows. Derivative
instruments are used for hedging purposes only and are subject to hedge accounting.
As of June 30, 2019:
Contract amount(*1)
Method ofhedge
accounting

Type ofderivativetransaction

Main hedged
item

Fair
Value
(*2)

Over 1year

Total(in thousands of yen)Interest rate
swap
transaction
floating ratereceivable
and Fixed
rate payable

Principle
accounting
methodCurrency
options
Sell –USD Call(Optionpremium)
Currency
options
Buy –USD Put
Optionpremium

Long-term
borrowings

Futuretransactions
denominatedina foreign
currency¥

84,074,000¥ 51,413,000¥

5,134,140¥

1,933,140¥(133,171)¥(42,806)¥

5,134,140¥

1,933,140¥

225,420¥

102,873¥(19,845)¥(33,916)¥

233,622(*1) The interest rate swap contract amount is based on the notional principal amount.
(*2) Calculation of fair value is based on information provided by financial institutions.

As of December 31, 2019:
Contract amount(*1)
Method ofhedge
accounting

Type ofderivativetransaction

Principle
accounting
methodInterest rate
swap
transaction
floating ratereceivable
and Fixed
rate payable

Main hedged
item

Total

Contract amount(*1)
Fair
Value
(*2)

Over 1year(in thousands of yen)

Long-term
borrowings¥

95,112,000¥ 66,133,000

Fair
Value
(*2)

Over 1year

Total(in thousands of U.S. dollars)¥

64,609$868,127$

603,623

$

36

589

Currency
options
Sell –USD Call(Optionpremium)
Currency
options
Buy –USD Put
Optionpremium

Futuretransactions
denominatedina foreign
currency¥

3,836,140¥

622,160¥(95,963)¥(13,687)¥

3,836,140¥

622,160¥

191,665¥

38,743¥(24,788)¥

89,405$35,014

$

5,678

$

(875)

$

(124)

$

35,014

$

5,678

$

1,749

$

353

$

(226)

$

816

(*1) The interest rate swap contract amount is based on the notional principal amount.
(*2) Calculation of fair value is based on information provided by financial institutions.

20. Asset Retirement Obligations
The Company has an obligation under a fixed-term leasehold agreement to restore its leased land, which represents the land where
COMFORT HOTEL MAEBASHI, owned by the Company, is located upon the termination of agreement. The estimated period of useof property is estimated at 43 years based on the lease period per the agreement. The assets retirement obligation for the restoration isrecognized as a liability using discount rate at 1.342%.
Movements of asset retirement obligations for the six months ended June 30, 2019 and December 31, 2019 are as follows.

For the six months ended

June 30,2019

December 31,
2019

December 31,
2019(in thousands of
U.S. dollars)(in thousands of yen)
Balance at the beginning of the period ······································· ¥32,107¥32,321$295

Liabilities incurred due to the acquisition of properties ·······

-

-

-

Accretion expense ·············································································

213

218

1

Balance at the end of the period ··················································· ¥32,321¥

32,539$297

21. Segment Information
Segment information for the six months ended June 30, 2019 and December 31, 2019 is as follows:(a) Operating Segment Information
Disclosure is omitted as the Company is comprised of a single reportable segment engaged in the property rental business.
(b) Enterprise-wide Disclosures(i) Information about Products and Services
Disclosure is not required as revenues from external customers for the single segment are in excess of 90% of total revenues.
(ii) Information about Geographic Areas(1) Revenues from Overseas Customers:
For the six months ended June 30, 2019(in thousands of yen)
Japan

Grand Cayman
24,098,860

Total

3,240,809

27,339,670

For the six months ended December 31, 2019(in thousands of yen)
Japan

Grand Cayman

Total

37

17,189,631

1,397,621

18,587,253(in thousands of U.S. dollars)
Japan

Grand Cayman
156,896

Total
12,756

169,653(2)Tangible Fixed Assets:
Disclosure is not required as tangible fixed assets located in Japan are in excess of 90% of total tangible fixed assets.
(c) Information about Major Customers
Information about major clients for the six-month periods ended, June 30, 2019 and December 31, 2019 were as follows:
For the six months ended June 30, 2019

Name of client

Operating Revenues(in thousands of yen)

Related segment

Mystays Hotel Management Co.,Ltd.

¥6,581,126

Real estate investing business

Undisclosed (1)¥5,633,813

Real estate investing business

Undisclosed (2)¥5,484,169

Real estate investing business

For the six months ended December 31, 2019

Name of client

Operating Revenues(in thousands of yen)

Operating Revenues(in thousands of U.S. dollars)

Related segment

Mystays Hotel Management Co.,Ltd.

¥8,084,924$73,794

Real estate investing business

Undisclosed (1)¥1,970,306$17,983

Real estate investing business

Notes(1) The name of the client (an affiliate of a foreign real estate fund) is not disclosed, as the client’s consent has not been obtained for disclosure. The client is
not included in the group entities of the company and the Asset Manager.
(2) The name of the client (a Japanese TMK (Tokutei Mokuteki Kaisha)) is not disclosed, as the client’s consent has not been obtained for disclosure. The
client is not included in the group entities of the company and the Asset Manager.

22. Profit or Loss from Equity Method, etc
For the six months ended June 30, 2019(in thousands of yen)
Investments in affiliates

17,856,387

Investments, if equity method was adopted

17,856,387

Investment gains (losses), if equity method was adopted

3,487,698

38

For the six months ended December 31, 2019(in thousands of yen)(in thousands of US dollars)

Investments in affiliates

17,856,387

162,982

Investments, if equity method was adopted

17,856,387

162,982

673,498

6,147

Investment gains (losses), if equity method was adopted

23. Related-Party Transactions(a) Parent Company and Major Corporate Unitholders

For the six months ended June 30, 2019
SharecapitalType ofrelated-party

Interested
party of the
Asset
Manager

Transactions for the period
Votinginterest intheCompany

Relationshipwith theCompany

Company
nameLocation

Naqua Hotel& Resorts
Management
Co., Ltd.(2)Minato-ku,
Tokyo

Hotel
managementbusiness¥ 10-

Lease holder andoperator of hotel

RentalRevenues¥590,306

Rentalreceivables¥197,253

Mystays
HotelManagement
Co., Ltd.(2)Minato-ku,
Tokyo

Hotel
managementbusiness¥ 100-

Lease holder andoperator of hotel

RentalRevenues¥6,581,126

Rentalreceivables¥1,834,677

Business(inmillionsof yen)Amounts (1)Balance at the end of period

Type oftransactions(inthousands ofyen)

Balancesheet
account

Amounts(1)(inthousandsof yen)Notes:(1)

Consumption taxes are not included in the transaction amount, but are included in the balance at the end of periods.

(2)

Naqua Hotel & Management Resorts Management Co. Ltd, and Mystays Hotel Management, Co. Ltd has no relationship to be stated, they receive investment through funds
that are managed by FIG, a subsidiary of Softbank Group; a parent company of the asset manager directly and indirectly owning 100% of issued shares. Accordingly, we
treat Naqua Hotel & Management Resorts Management Co. Ltd, and Mystays Hotel Management, Co. Ltd as a related party.

For the six months ended December 31, 2019
Share capital
Type ofrelated-party

Interested
party of the
Asset
Manager

Transactions for the period(inthousandsof U.S.
dollars)

Votinginterest intheCompany

Relationshipwith theCompany

Company
nameLocation

Business

Shirahama
TMK(3)

Minato-ku,
Tokyo

Investment
managementbusiness

¥0.1

$0

-

Seller of real estate
trust beneficiaryinterests

TouyakoGK(3)Minato-ku,
Tokyo

Investment
managementbusiness

¥0.1

$0

-

Seller of real estate
trust beneficiaryinterests

CalvisTMK(3)

Minato-ku,
Tokyo

Investment
managementbusiness

¥0.1

$0

-

Seller of real estate
trust beneficiaryinterests

Yaeyama
Resort Hotel
TMK(3)

Minato-ku,
Tokyo

Investment
managementbusiness

¥0.1

$0

-

Seller of real estate
trust beneficiaryinterests

Saturnia
TMK(3)

Minato-ku,
Tokyo

Investment
managementbusiness

¥0.1

$0

-

Seller of real estate
trust beneficiaryinterests

Kawaguchiko
TMK(3)

Minato-ku,
Tokyo

Investment
managementbusiness

¥0.1

$0

-

Seller of real estate
trust beneficiaryinterests(inmillionsof yen)Balance at the end of period

Amounts (1)Type oftransactions

Acquisition ofreal estate
trust
beneficiaryinterests(2)(4)Acquisition ofreal estate
trust
beneficiaryinterests(2)(4)Acquisition ofreal estate
trust
beneficiaryinterests(2)(4)Acquisition ofreal estate
trust
beneficiaryinterests(2)(4)Acquisition ofreal estate
trust
beneficiaryinterests(2)(4)Acquisition ofreal estate
trust
beneficiaryinterests(2)(4)

Amounts(1)(inthousandsof yen)(inthousandsof U.S.
dollars)¥22,322,000$203,742¥15,543,000

Balancesheet
account(inthousandsof yen)(in thousandsof U.S.
dollars)---$141,867---¥11,492,000$104,892---¥9,731,000$88,818---¥9,405,000$85,843---¥8,629,000$78,760

-

-

-

39

Share capital
Type ofrelated-party

Interested
party of the
Asset
Manager

Transactions for the period(inthousandsof U.S.
dollars)

Votinginterest intheCompany

Relationshipwith theCompany

Company
nameLocation

Business

HL
Investments
2 TMK(3)Minato-ku,
Tokyo

Investment
managementbusiness

¥0.1

$0

-

Seller of real estate
trust beneficiaryinterests

Naqua Hotel& Resorts
Management
Co., Ltd.(2)Minato-ku,
Tokyo

Hotel
managementbusiness

¥ 10

$91

-

Mystays
HotelManagement
Co., Ltd.(2)Minato-ku,
Tokyo

Hotel
managementbusiness

¥ 100

$912

-

(in
millionsof yen)Balance at the end of period

Amounts (1)Amounts(1)Balancesheet
account(inthousandsof yen)(inthousandsof U.S.
dollars)

Acquisition ofreal estate
trust
beneficiaryinterests(2)(4)¥5,524,000$50,419-

Lease holder andoperator of hotel

RentalRevenues¥1,133,572$10,346

Rentalreceivables¥195,942$1,788

Lease holder andoperator of hotel

RentalRevenues¥8,084,924$73,794

Rentalreceivables¥2,664,336$24,318

Type oftransactions(inthousandsof yen)(in thousandsof U.S.
dollars)--

Notes:(1)

Consumption taxes are not included in the transaction amount, but are included in the balance at the end of periods.

(2)

Terms and conditions are decided pursuant to the Asset Manager's Regulations on Transactions with Sponsor-related Persons and the Management Manual regarding
Transactions with Sponsor-related Persons.

(3)

The seller, Shirahama TMK, Touyako GK, Calvis TMK, Yaeyama Resort Hotel TMK, Saturnia TMK, Kawaguchiko TMK, HL Investments 2 TMK, Naqua Hotel &Management Resorts Management Co. Ltd, and Mystays Hotel Management, Co. Ltd has no relationship to be stated, they receive investment through funds that aremanaged by FIG, a subsidiary of Softbank Group; a parent company of the asset manager directly and indirectly owning 100% of issued shares. Accordingly, we treat ,Shirahama TMK, Touyako GK, Calvis TMK, Yaeyama Resort Hotel TMK, Saturnia TMK, Kawaguchiko TMK, HL Investments 2 TMK, Naqua Hotel & Management Resorts
Management Co. Ltd, and Mystays Hotel Management as a related party.

(4)

The transaction amount is stated based on the transaction price under the purchase and sale agreement of trust beneficiary interests, and does not include the expenses in thetransaction, property tax, city planning tax, and consumption taxes.

Acquisition of real estate trust beneficiary interests are relating to below
Acquisition cost(in thousands of yen)SellerAcquisition cost(in thousands of US dollars)

Property No.

Property name

D64

Hotel MyStays Sapporo Aspen

Touyako GK

15,543,000

141,867

D65

Art Hotel Ishigakijima

Yaeyama Resort Hotel TMK

9,731,000

88,818

D66

Hotel MyStays Fuji Onsen Resort

Saturnia TMK

9,405,000

85,843

D67

Hotel Sonia Otaru

Shirahama TMK

5,930,000

54,125

D68

Hotel MyStays Kanazawa Castle

Calvis TMK

5,682,000

51,861

D69

Art Hotel Niigata Station

HL Investments 2 TMK

5,524,000

50,419D70

Hotel MyStays Nagoya Nishiki

Shirahama TMK

5,197,000

47,435

D71

Hotel Nord Otaru

Shirahama TMK

4,296,000

39,211

D72

Hotel MyStays Kagoshima Tenmonkan

Kawaguchiko TMK

3,445,000

31,443

D73

Art Hotel Asahikawa

Shirahama TMK

3,197,000

29,180D74

Hotel MyStays Matsuyama

Calvis TMK

3,098,000

28,276

D75

Hotel MyStays Sapporo Susukino

Kawaguchiko TMK

3,059,000

27,920

D76

Hotel MyStays Sapporo Nakajima Park

Shirahama TMK

2,118,000

19,331

D77

Hotel MyStays Sapporo Nakajima Park
Annex

Shirahama TMK

1,584,000

14,457

D78

Flexstay Inn Sakuragicho

Calvis TMK

1,425,000

13,006D79

MyCUBE by MYSTAYS Asakusa Kuramae

Calvis TMK

1,287,000

11,746

D80

Hotel MyStays Kagoshima Tenmonkan
Annex

Kawaguchiko TMK

1,168,000

10,660D81

Hotel MyStays Nayoro

Kawaguchiko TMK
Total

957,000

8,734

82,646,000

754,344(b) Affiliates
For the six months ended June 30, 2019
Share capital

Type ofrelated-p
arty

Company nameAffiliates

Seven
Mile
ResortHoldings Ltd.

Location

BusinessAmounts (1)(2)(in millions of yen)

Grand
Cayma
n,
Cayma
n

Investmentmanagementbusiness¥ 36,783

Investment
ratio

Relationshi
p with theCompany

100.0%

TK
investment

Transactions for the period
Type oftransactions
Investme
nt in theTK (2)(3)Acquisiti
on ofBalance at the end of period(in millions of yen)

Balancesheet
account(in millions of yen)

¥ 36,783--¥ 35,903--

Amounts (1)(2)

Amounts (1)(2)40

Islands

fixed
assets (3)(1)

Investment amount in USD is converted to yen using the exchange rate fixed by foreign exchange forward (USD 1=JPY 110.45 (rounded down to two decimal places)).

(2)

INV initially funded USD 339,836 thousand (JPY 37,534 million). However, based on the closing settlement, the Cayman SPC did not need as much capital as anticipated.
Therefore, INV received a refund of the TK investment in the amount of USD 6.8 million on December 10, 2018 (Cayman Island local time) from the Cayman SPC. Thus, theamounts indicated are those after the partial refund.
Investment was made based on a TK agreement with Seven Mile Resort Holdings Ltd. as an operator. INV acquired the Leasehold of the Cayman Hotels by way of a(3)

distribution in kind after the termination of the TK agreement on May 9, 2019. Acquisition price of Leasehold differs from the amount of refund of the TK investment since thebook value as of May 9, 2019 is deemed the acquisition price of these properties.

For the six months ended December 31, 2019
Not Applicable(c)

Board of Directors and Major Individual Unitholders

For the six months ended June 30, 2019

Type ofrelated-party

Directors
and close
relatives

Name

Naoki
FukudaTransactions for the period

Votinginterest intheCompany

Business / Occupation

Executive officer of theCompany andmanagement director ofConsonant Investment
Management Co., Ltd.

-Balance at the end of period
Amounts(3)(in thousands of yen)
Payment of the assets management
fee to Consonant Investment
Management Co., Ltd.(1)Payment of institution
management fee to Consonant
Investment Management Co.,
Ltd.(2)

Amounts(3)Balance sheet
account

Type of transactions(in thousands ofyen)¥419,700

Accruedexpenses¥291,276¥600

Accruedexpenses¥324

Notes:(1)

Naoki Fukuda serves as a representative of the Asset Manager and the asset management fee is established in the Articles of Incorporation of the Company.

(2)

Naoki Fukuda serves as a representative of Asset Manager and the fee is established in the “Administrative Agency Agreement for Organizational Management” which wasagreed between the Asset Manager and the Company.

(3)

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

For the six months ended December 31, 2019
Transactions for the period
Type ofrelated-party

Directors
and close
relatives

Name

Naoki
FukudaBusiness /Occupation

Executive officer of
the Company andmanagement
director ofConsonantInvestment
Management Co.,Ltd.

Votinginterest intheCompany-

Balance at the end of period

Amounts(3)Type of transactions

Payment of the assets
management fee to Consonant
Investment Management Co.,
Ltd.(1)
Payment of institution
management fee to Consonant
Investment Management Co.,
Ltd.(2)

Amounts(3)(inthousandsof yen)(inthousandsof U.S.
dollars)¥323,669$2,954¥1,100$10(inthousandsof yen)(inthousandsof U.S.
dollars)

Accruedexpenses¥181,945$1,660Accruedexpenses¥880$8Balance sheet
account

Notes:(1)

Naoki Fukuda serves as a representative of the Asset Manager and the asset management fee is established in the Articles of Incorporation of the Company.

(2)

Naoki Fukuda serves as a representative of Asset Manager and the fee is established in the “Administrative Agency Agreement for Organizational Management” which wasagreed between the Asset Manager and the Company.

(3)

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

24. Parent company and/or significant affiliates(a) Information on the parent company
Not Applicable.

(b) Summary of financial statements of the significant affiliates
The significant affiliates in the year ended December 31, 2019 is Kingdom TMK. Summary of financial statements are as follows:
Kingdom TMK

41

As of / For the six months ended
December 31, 2019

June 30, 2019(in thousands of yen)
Total specified assets

December 31, 2019(in thousands of US dollars)

100,524,164

100,450,855

916,857

Total other assets

3,972,036

3,753,104

34,256

Total current liabilities

106,709

128,712

1,174

Total non-current liabilities

66,280,661

66,280,661

604,971

Total net assets

38,108,830

37,794,586

344,967

Operating revenue

2,333,624

2,010,770

18,353

Income before income taxes

1,689,613

1,375,369

12,553

Net income

1,688,730

1,374,486

12,54525. Per Unit Information
The following table shows net asset value per unit as of June 30, 2019 and December 31, 2019 and net income per unit for the six months
then ended. Net income per unit is calculated by dividing the net income attributable to unitholders by the weighted average number ofunits outstanding. The Company has no potentially dilutive units.
As of / For the six months ended

June 30,2019

December 31,
2019

December 31,
2019

(Yen)

(U.S. dollars)

Net asset value per unit ··································································· ¥41,125¥42,601$

388

Net income per unit ········································································· ¥

3,748

¥

1,910

$

17

Weighted average number of units ············································

5,666,840

6,093,427-

26．Subsequent Events(a) Sale of Assets
The Company completed sale of the following one property on January 15, 2020
Property Number : A51

Property Name: City House Tokyo Shinbashi

Sale Date

January 15, 2020

Location

Minato-ku, Tokyo

Book Value (Note 1)

JPY 2,269 million

Sales Price (Note 2)

JPY 4,465 million

Estimated Gain on Sales (Note 3)

JPY 2,043 million

Transferee

Not disclosed (Note 4)

Legal Form of Asset

Trust beneficiary interest(Note 1) Book Value shows a figure as of December 31, 2019.
(Note 2) Sale Price does not include transfer related cost, adjustments for fixed asset taxes or city planning taxes, or national or local
consumption taxes.
(Note 3) Estimated Gain on Sale is calculated by deducting the Book Value and estimated transfer related cost from Sale Price.
(Note 4) The name of the transferee is not disclosed, as the transferee’s consent has not been obtained for disclosure.

(b) New borrowings
In order to raise a part of the funds to be used for the acquisition of the 2 hotel properties acquired on January 6, 2020, the Company
borrowed New Syndicate Loan (P).
New Syndicate Loan (P)42Lender

Sumitomo Mitsui Trust Bank, Limited

Borrowing amountJPY 6,980 million

Interest rate, etc.

Base rate (1-month JPY TIBOR) +0.500%, 0.300%, 0.200%

Interest payment date(i) The last Japanese business day of each month before the principal maturity date, beginningwith January 31, 2020, and (ii) the principal maturity date,Principal repayment method

Lump-sum repayment

Borrowing method

Unsecured / with no guarantee

Borrowing date

January 6, 2020,

Maturity date

January 6, 2025, January 6, 2023, January 6, 2021,(c)

Acquisition of assets (properties)

The Company acquired 2 hotel properties as shown in the following table on January 6, 2020
Acquisition
price
Use

Property

Property

numbername

Location

Construction completion
(JPY

date

million)

Total

Category

rentableareaofSellerspecified

(㎡)

asset

(Note)

Hotel
Hotel

D82

MyStays

Narita-shi,

Premier

Chiba

May 1985

10,59336,519.70

Narita

Hotel

D83

Art
Morioka

HotelMorioka-shi,
Iwate

March 1981

5,643

16,727.08

Adria Tokutei

Trust

Mokuteki

beneficiary

Kaishainterest

Heijo Tokutei

Trust

Mokuteki

beneficiary

Kaishainterest(Note) Acquisition price is stated based on the transaction price under the purchase and sale agreement. Acquisition price does not include the expenses in the acquisition,
adjustments for property taxes and city planning taxes, and national and local consumption taxes.

43