Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)

Investment
Invincible Corporation

Financial Summary
for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)
February 26, 2024

Name
Representative
Stock Listing
Securities CodeURL
Contact

:
:
:
:
:
:

Invincible Investment Corporation (“INV”)
Naoki Fukuda, Executive Director
Tokyo Stock Exchange8963
https://www.invincible-inv.co.jp/en/
Consonant Investment Management Co., Ltd.
(Asset Manager of INV)
Jun Komo, General Manager of Planning Department
Tel. +81-3-5411-2731

Start date fordividend distribution: March 22, 2024

This English language notice is a translation of the Japanese-language notice released on February 26, 2024 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility. This translation of the original Japaneselanguage notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completenessof this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between thistranslation and the Japanese original, the latter shall prevail in all respects.

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)

1.

(Figures are rounded down to the nearest JPY million)
Financial Results for the Fiscal Period ended December 31, 2023 (from July 1, 2023 to December 31, 2023)(1)

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

Fiscal period ended
December 31, 2023
Fiscal period ended
June 30, 2023

Ordinary Income%

JPY million%

18,81918.2

12,58821.6

15,91433.4

10,35665.5

JPY million

Net Income%

JPY million%

11,03323.8

11,032

23.8

8,914

75.6

8,913

75.6

Ordinary Income /Total Assets

Ordinary Income /Operating Revenues

Net Income per Unit

Net Income /Unitholders’ Equity

JPY

%

%

%

1,639

4.1

2.1

58.6

1,462

3.5

1.8

56.0

Fiscal period ended
December 31, 2023
Fiscal period ended
June 30, 2023
(2)

Operating Income

Distributions
Distribution(Excluding excess profit distribution)

Per Unit
Fiscal period ended
December 31, 2023
Fiscal period ended
June 30, 2023

Total

Excess Profit Distribution
Per Unit

Dividend Payout
Ratio

Distribution/ Net Assets

Total

JPY

JPY million

JPY

JPY million

%

%

1,640

11,048

-

-

100.1

3.9

1,464

8,925

-

-

100.1

3.5

(Note 1) Dividend Payout Ratio is calculated in accordance with the following formula and is rounded to the nearest one decimal place:
Dividend Payout Ratio = Distribution Amount (Excluding excess profit distribution) ÷ Net Income × 100(Note 2) Distribution / Net Assets is calculated based on the figures excluding excess profit distribution.

(3)

Financial Position
Total Assets

Fiscal period ended
December 31, 2023
Fiscal period ended
June 30, 2023
(Note)(4)

JPY million

Net Assets / Total%
AssetsNet Assets per Unit

JPY million

Net Assets

563,393

290,305

51.5

43,090496,819

254,024

51.1

41,665JPY

Net Assets per Unit is calculated based on the number of investment units issued and outstanding at the end of each fiscal
period and is rounded to the nearest yen.

Cash Flows
Cash Flows fromOperating
Activities

Cash Flows from
Investment
Activities

Cash Flows from
Financing
Activities

Closing Balance ofCash and
Cash Equivalents

JPY million

JPY million

JPY million

JPY million

Fiscal period ended
December 31, 2023

12,773(58,442)

52,52034,892

Fiscal period ended
June 30, 2023

13,782924(7,188)28,041

2

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)

2.

Forecasts for the Fiscal Period ending June 30, 2024 (from January 1, 2024 to June 30, 2024) and the Fiscal Period
ending December 31, 2024 (from July 1, 2024 to December 31, 2024)

Operating
Revenues
JPY
millionFiscal period
ending20,199June 30, 2024
Fiscal period
ending20,255
December 31, 2024

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

JPY
million%JPY
million%

7.3 13,717

9.0

11,8870.3 13,509(1.5)

11,699%JPY
million

%

JPY

JPY

7.7 11,886

7.7

1,767

-

(1.6) 11,698

(1.6)

1,739

-

(Reference) Estimated net income per unit for the fiscal periods ending June 30, 2024 and the fiscal periods ending December 31, 2024 are
JPY 1,764 and JPY 1,736.

※Others(1) Changes in Accounting Policies, Accounting Estimates or Restatements(a) Changes in Accounting Policies due to Revisions to
Accounting Standards and Other Regulations

None(b) Changes in Accounting Policies due to Other Reasons

None(c) Changes in Accounting Estimates

None(d) Restatements

None(2) Number of Investment Units Issued and Outstanding(a) Number of Units Issued and Outstanding

December 31, 2023 6,737,121 June 30, 2023 6,096,840

as of the End of the Fiscal Period (Including Treasury Units)(b) Number of Treasury Units as of the End of the Fiscal Period

December 31, 2023

0 June 30, 2023

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

・ Financial Summary report is not subject to audit procedure by certified public accountants or audit corporations.
・ Special Consideration
The forward-looking statements contained in this financial summary report are based on the information
currently available to us and certain assumptions which we believe are reasonable. Actual operating performance
may differ significantly due to factors we cannot predict as of the date of this document, including gains or losses
from the disposition of properties, repayment of borrowings, decreases in rents and changes in operating
conditions. Unless otherwise specified herein, amounts less than JPY 1 are rounded down, and ratios are rounded
to the nearest one decimal place.

30Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)

1. Operating Conditions(1) Operating Conditionsa

Overview of the Fiscal Period Ended December 31, 2023

(a)

Main Trends of INV

INV was established in January 2002 in accordance with the Investment Trust and Investment Corporation Act(Act No. 198 of 1951, as amended). In May 2004, INV was listed on the Osaka Securities Exchange (application
for delisting was made in August 2007), and in August 2006 was listed on the Real Estate Investment and Trust
Securities Section of the Tokyo Stock Exchange (Ticker Code: 8963).
After the absorption-type merger with LCP Investment Corporation (“LCP”) was implemented on February 1,
2010, INV issued new investment units through a third-party allotment on July 29, 2011 and refinanced its debt.
Calliope Godo Kaisha (“Calliope”), an affiliate of the Fortress Investment Group LLC (“FIG” and together with
Calliope and other affiliates of FIG, collectively the “Fortress Group”) was the main allottee, and the sponsor
changed to the Fortress Group.
Ever since the commencement of sponsorship from the Fortress Group (Note 1), INV has been focusing its efforts
on improving the profitability of its portfolio and establishing a revenue base in order to secure stable
distributions, and has strengthened the lender formation through new borrowings and the refinancing of existingbank borrowings, thereby creating a financial base for external growth. With this platform as a base, in June
2014, Consonant Investment Management Co., Ltd., the asset manager to which INV entrusts the managementof its assets (“CIM”) revised the Investment Guidelines for INV, positioned hotels as a core asset class alongsideresidential properties with a view towards expanding investments in the hotel sector in which demand isforecasted to rise going forward, and has expanded its portfolio.
In the Fiscal Period ended December 31, 2023 (“Reporting Period”), INV implemented a global offering of new
investment units for the first time in four years and acquired six domestic hotels including the flagship “Fusaki
Beach Resort Hotel & Villas”, or the largest property in INV’s portfolio. INV's portfolio at the end of theReporting Period comprised of 134 properties (92 hotels (Note 2) (Note 3), 41 residential properties and one
retail facility) with a total acquisition price of JPY 548,646 million (Note 4). Furthermore, INV’s hotel portfolio
has the largest asset size (Note 5) of JPY 507,861 million (92 properties, 16,624 rooms) among all J-REITs (realestate investment corporations which are listed on the Tokyo Stock Exchange Real Estate Investment Trust
Securities Market, hereinafter the same shall apply) hotel portfolios including Hotel J-REITs (Note 6) .
(Note 1) Calliope transferred 80.0% of issued shares to Fortress CIM Holdings L.P., a subsidiary of SoftBank
Group and 20.0% to SoftBank Group Corp. (“SoftBank Group”) on March 29, 2018, but the SoftBank
Group transferred its issued shares of CIM to Fortress CIM Holdings L.P. As of the date of thisdocument, SoftBank Group indirectly owns 100% of issued shares of CIM through Fortress CIM
Holdings L.P. The SoftBank Group announced that it has entered into a definitive agreement totransfer its interest in the indirect parent company of Fortress CIM Holdings L.P. to Mubadala Capitaland others during the first quarter of 2024.
(Note 2) The preferred equity interest held by INV is counted as one property. Such preferred equity interest
issued by a special purpose company (tokutei mokuteki kaisha) refers to 178,458 units of the preferred
equity interest issued by Kingdom Special Purpose Company (equivalent to 49.0% of the outstanding
preferred equity interest), which owns the trust beneficiary interest of the Sheraton Grande Tokyo
Bay Hotel as an underlying asset. The property is classified as a hotel, based on the use of Sheraton
Grande Tokyo Bay Hotel, the underlying asset of the preferred equity interest, and INV’s investment
amount of the preferred equity interest is used as the acquisition price of the preferred equity interest,
unless otherwise stated. The “underlying asset” refers to the real estate or the real estate related
assets owned by a TK operator of TK interest or a TMK relating to the preferred equity interest which
INV owns, thus the real estate or the real estate related assets which will be the revenue source of
INV. Hereinafter the same shall apply.
(Note 3) From September 28, 2018 (Cayman Island local time; September 29, 2018 in Japan local time), INV
owned 100% of the TK interest in Seven Mile Resort Holdings Ltd. (the “Cayman SPC”), a Cayman
Islands special purpose company that holds leasehold interests in Westin Grand Cayman Seven Mile
4

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)

Beach Resort & Spa and Sunshine Suites Resort (collectively, the “Cayman Hotels”) and ancillary assets
as underlying assets. However, INV implemented the investment structure change (the “Structure
Change” in some cases hereinafter) regarding the Cayman Hotels on May 9, 2019 (Cayman Island
local time; May 10, 2019 in Japan local time) and has directly held the Leasehold Interests, etc. of the
Cayman Hotels thereafter. Both of the TK interest and the Cayman Hotels are counted as two
properties before and after the Structure Change. In addition, the “Leasehold Interests, etc.” means
leasehold interests (rights equivalent to long-term real estate leases on land and buildings under the
British Cayman laws) and furniture, fixtures, equipment, ornaments, kitchen instrument, and otherassets required for hotel operations. Hereinafter the same shall apply.
(Note 4) Due to the Structure Change, the book value of the leasehold interests of the Cayman Hotels recordedby the Cayman SPC as of May 9, 2019 (Cayman Island local time; May 10, 2019 in Japan local time),
when INV succeeded the leasehold interests of the Cayman Hotels from the Cayman SPC via
distribution in kind in connection with the termination of TK agreement, is deemed as the acquisition
price of the Cayman Hotels. The book value is converted into JPY amount via exchange rate of USD
1=JPY 110.45 based on the foreign exchange forward contracts executed on July 26, 2018 andimplemented on September 26, 2018 in connection with the investment in the TK interest by INV.
Hereinafter the same shall apply.
(Note 5) Hotel J-REIT is defined as the J-REIT whose majority part of portfolio consists of hotel assets.
(Note 6) “The largest asset size … among all J-REIT hotel portfolios” refers to the total acquisition price of 92
hotels owned by INV as compared with the total acquisition price of hotels (including inns and otheraccommodation facilities) owned by listed investment corporations other than INV as of December
31, 2023.
(b)

Operational Environment and Performance

The portfolio NOI (Note 1) increased by 63.7% or JPY 6,695 million compared to the same period in the previous
year (the December 2022 fiscal period) to JPY 17,205 million. Of which, the hotel portfolio NOI increased by
JPY 6,692 million and the residential and retail portfolio NOI increased by JPY 3 million. Compared to theDecember 2019 fiscal period prior to the COVID-19 pandemic, the portfolio NOI increased by 13.5% or JPY
2,041 million, of which the hotel portfolio NOI increased by JPY 2,830 million and the residential and retail
portfolio NOI decreased by JPY 789 million due to asset sales.
Commentary on hotel and residential performance is as described below.
Domestic hotel portfolio continued to recover from the COVID-19 pandemic. Even with the gradual end of
the "National Travel Discount Campaign" program, the government’s travel subsidy program, there has been
no decline in demand due to a reaction from the elimination of the program. Coupled with the strong
inbound demand with the help of the weak yen, each performance metric of the domestic hotel portfolio
increased significantly over the same period of the previous year's results. While occupancy rates (Note 2)
were slightly below the 2019 levels, ADR (Note 3) and RevPAR (Note4) were above the 2019 levels. The GOP(Note 5) for the Reporting Period of the 75 domestic hotels (Note 6) owned by INV increased by 58.6%
compared to the same period in the previous year (figures exclude nine domestic hotels with fixed-rent leaseagreements among the 84 domestic hotels owned by INV as of the end of the Reporting Period, including
Sheraton Grande Tokyo Bay Hotel, the underlying asset of the preferred equity interest of TMK owned by
INV). The 75 domestic hotels recorded an occupancy rate of 82.7%, ADR of JPY 12,649, and RevPAR of JPY
10,462. Compared to the June 2019 fiscal period prior to the COVID-19 pandemic, the GOP increased by 9.0%,
the occupancy rate decreased by 5.7pt, ADR increased by 19.2%, and RevPAR increased by 11.5%.
The Cayman Hotels recorded an average occupancy rate of 64.8%, ADR of USD 421, and RevPAR of USD 273
for the Reporting Period and the figures significantly exceeded the same period in the previous year.
Compared to the June 2019 fiscal period prior to the COVID-19 pandemic, the occupancy rate decreased by
7.5pt, ADR increased by 28.6%, and RevPAR increased by 15.3%. Occupancy has not returned to 2019 levels
as the number of commercial flights between the Cayman Islands and the U.S. have not recovered to 2019
levels, but ADR has grown significantly due to high demand and RevPAR has remained above 2019 levels.
Regarding the residential portfolio (Note 7), the occupancy rate (Note 8) of 41 residential properties remained
unchanged from 95.9% at the end of the previous fiscal period to 95.9% at the end of the Reporting Period.
5

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)

The average occupancy rate (Note 8) decreased by 0.3 points YoY to 96.0%.
Reporting Period increased by 0.2% YoY.

The NOI (Note 9) for the

In the Reporting Period, INV realized a rent increase for 55.9% (based on the number of contracts) of the newresidential lease contracts, and the new rent increased by 1.3% compared to the previous rent across all newleases (Note 10). INV achieved a rent increase for 46.8% (based on the number of contracts) of contract
renewals with an average rent increase of 1.3% compared to the previous rent across all renewal leases, while
maintaining a high contract renewal rate (Note 11) of 75.1%. Combined, new lease and renewal lease rents
were signed at 1.3% higher than the previous leases. The average rent per tsubo per month (Note 12) for theReporting Period increased by 0.5% YoY to JPY 9,214.
The total appraisal value of 133 properties was JPY 629,041 million (one out of the 134 properties owned by
INV at the end of the Reporting Period is excluded from the appraisal calculation: Sheraton Grande Tokyo Bay
Hotel (preferred equity interest) for which the appraisal value of such interest is not available). The portfolio
has an unrealized gain of JPY 133,259 million (Note 13) and an unrealized gain ratio of 26.9% (Note 13). The
total appraisal value of 127 properties which were owned throughout the Reporting Period increased by 1.8%
from JPY 560,963 million at the end of the June 2023 fiscal period to JPY 570,791 million at the end of theReporting Period.
Key Performance Indicators of 75 Domestic Hotel Properties (Note 6)
December 2023
fiscal period

Year-on-year change

vs 2H 2019

Occupancy Rate (Note 2)

82.7%+6.8pt-5.7ptADR (JPY) (Note 3)

12,649+24.0%+19.2%

RevPAR (JPY) (Note 4)

10,462+35.1%+11.5%GOP (JPY million) (Note 5)

14,041+58.6%+9.0％

Key Performance Indicators of Cayman Hotels
December 2023
fiscal period

Year-on-year change+8.6pt-7.5pt421+4.6%+28.6%

273+20.7%+15.3%

14,600,431+10.8%+10.0%

Occupancy Rate (Note 2)

64.8%

ADR (USD) (Note 3)
RevPAR (USD) (Note 4)
GOP (USD) (Note 5)vs 2H 2019

Key Performance Indicators of 41 Residential Properties (Note 7)
December 2023
fiscal period
Occupancy Rate (Note 8)
Average Rent per Tsubo per Month(JPY) (Note 12)
NOI (JPY million) (Note 9)

Year-on-year change

96.0%-0.3pt

9,214

+0.5%

1,120

+0.2%

(Note 1) “NOI” for the hotel properties is calculated in accordance with the following formula:
NOI＝ Rental Revenues ‐ Property Related Expenses + Depreciation Expenses + Dividend on thepreferred equity interest (TMK dividend) + (Management Contract Revenue of the Cayman Hotels‐Management Contract Expense)(Note 2) “Occupancy rate” for the hotel properties is calculated in accordance with the following formula:
Occupancy rate = total number of occupied rooms during a certain period ÷ total number of rooms
available during the same period (number of rooms x number of days)
Hereinafter the same shall apply.
(Note 3) “ADR” means average daily rate, and is calculated by dividing total room sales (excluding service
fees) for a certain period by the total number of days per room for which each room was occupied
during the same period. Hereinafter the same shall apply.
6

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)(Note 4) “RevPAR” means revenues per available room per day, and is calculated by dividing total room sales
for a certain period by total number of rooms available (number of rooms x number of days) during
the same period, and is the same as the figure obtained by multiplying ADR by occupancy rates.
Hereinafter the same shall apply.
(Note 5) “GOP” means the gross operating profit, and is the amount remaining after deducting costs of hotel
operations (the personnel, utility and advertising expenses and other expenses) and the management
services fee to operators (if any) from the hotel’s revenues. GOP for each fiscal period ended June
2020 and onwards includes the amount of employment adjustment subsidies received by the hotel
operators for the respective fiscal periods. In addition, GOP for the Sheraton Grande Tokyo Bay
Hotel has been multiplied by 49%, or INV’s ownership ratio of the preferred equity interest.
Hereinafter the same shall apply.
(Note 6) Of the 84 hotels held as of the end of December 2023 (including the Sheraton Grande Tokyo Bay Hotel,
the underlying asset of the preferred equity interest of TMK owned by INV), the following nine hotels
with fixed-rent lease agreements etc. are excluded: Super Hotel Shinbashi/Karasumoriguchi, Comfort
Hotel Toyama, Super Hotel Tokyo-JR Tachikawa Kitaguchi, Super Hotel JR Ueno-iriyaguchi, Comfort
Hotel Kurosaki, Comfort Hotel Maebashi, Comfort Hotel Tsubame-Sanjo, Comfort Hotel Kitami and
Takamatsu Tokyu REI Hotel. In addition, the figures for the properties acquired after July 2019 are
calculated on the assumption INV had acquired those properties on July 1, 2019, using the actual
figures provided by the sellers of such properties for the period before the acquisition. "D48
Takamatsu Tokyu REI Hotel" changed its contract with its major tenant, Tokyu Hotels Corporation,
to fixed-rent with variable rent lease from April 25, 2023. However, in view of the continuity of
disclosed data, this hotel will continue to be excluded. Hereinafter the same shall apply.
(Note 7) Based on the 41 residential properties owned as of the end of December 2023. Hereinafter the same
shall apply.
(Note 8) “Occupancy Rate” and “Average Occupancy Rate” for the portfolio or the residential properties arecalculated by dividing the sum of total leased area by the sum of total leasable area at the end of eachmonth during the relevant period. Hereinafter the same shall apply.
(Note 9) For the comparison of NOI for the residential properties, one-off insurance-related revenues andexpenses are excluded. Hereinafter the same shall apply.
(Note 10) Increase or decrease in the sum of monthly rents on new or renewal contracts, or the total of both,compared with the sum of previous rents. Hereinafter the same shall apply.
(Note 11) Renewal rate is calculated by the number of renewed contracts during the relevant period divided by
the number of contracts due up for renewal during the relevant period.
(Note 12) “Average Rent per Tsubo per Month” is calculated by dividing the total rental revenue (includingcommon area charges) for each month by the sum of total leased area (tsubo) at the end of each month
during the relevant period.
(Note 13) The unrealized gain is calculated using the following formula: the appraisal value as of the end of theReporting Period – book value as of the end of the Reporting Period.
The unrealized gain ratio is calculated using the following formula: the unrealized gain ÷ book value
as of the end of the Reporting Period.
(c)Overview of Fund Raising
As a result of the measures described below, INV’s interest-bearing debt outstanding balance was JPY
269,100 million and the Interest-Bearing Debt ratio (Note 1) and LTV (appraisal value basis) (Note 2) were
47.2% and 42.2% respectively, as of the end of the Reporting Period, with an average interest rate (Note3) of 0.63%.
(Note 1) Interest-Bearing Debt ratio uses the calculation formula below:
Interest-Bearing Debt ratio = total outstanding interest-bearing debt (excluding short-term
consumption tax loan) / total assets x 100(Note 2) LTV (appraisal value basis) uses the calculation formula below:
LTV = total outstanding interest-bearing debt (excluding short-term consumption tax loan)/ total appraisal value (*) x 100(*) Since appraisal value for Sheraton Grande Tokyo Bay Hotel (preferred equity interest) is notavailable, the acquisition price of the preferred equity interest (JPY 17,845 million) is deemed7

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)

as appraisal value of Sheraton Grande Tokyo Bay Hotel (preferred equity interest). For
appraisal value of the Cayman Hotels, USD is converted into JPY amount via the forward
exchange rate of USD 1=JPY 110.45 based on the foreign exchange forward contract enteredinto on July 26, 2018 and executed on September 26, 2018.
(Note 3) The average interest rate (annual rate) is calculated by the weighted average based on theoutstanding balance of borrowings and rounded to two decimal places.
(i) Equity Financing
INV implemented a global public offering which closed on July 31, 2023 (the number of new investment units
issued: 609,792; total issue value: JPY 32,761 million) and a third party allotment which closed on August 28,
2023 (the number of new investment units issued: 30,489; total issue value: JPY 1,638 million) in order to procure
part of the funds for the acquisition of six domestic hotels described in “(d) Overview of Acquisition of Assets”.
(ii) Debt Financing
a. Borrowing of Funds
INV borrowed New Syndicate Loan (009) on July 14, 2023 and July 19, 2023 (total amount borrowed: JPY 59,343
million; interest rate: variable interest rate of 3-month JPY TIBOR plus 0.50000% for a duration of five years,
variable interest rate of 3-month JPY TIBOR plus 0.30000% (by the interest swap agreement on December 22,
2023, it is fixed, in effect, at 0.69100%) for a duration of three years, variable interest rate of 1-month JPY TIBOR
plus 0.30000% for a duration of three years, variable interest rate of 1-month JPY TIBOR plus 0.20000% for aduration of one year, variable interest rate of 3-month JPY TIBOR plus 0.50000% for a duration of five years,
variable interest rate of 3-month JPY TIBOR plus 0.30000% (by the interest swap agreement on December 22,
2023, it is fixed, in effect, at 0.69600%) for a duration of three years, variable interest rate of 1-month JPY TIBOR
plus 0.30000% for a duration of three years and variable interest rate of 1-month JPY TIBOR plus 0.20000% for aduration of one year), which was arranged by Mizuho Bank, Ltd. in order to repay New Syndicate Loan (I) in
the amount of JPY 9,659 million due on July 14, 2023 and New Syndicate Loan (003) in the amount of JPY 49,684
million due on July 19, 2023.
INV borrowed New Syndicate Loan (010) on August 1, 2023 (total amount borrowed: JPY 29,856 million; interest
rate: variable interest rate of 3-month JPY TIBOR plus 0.50000% (by the interest swap agreement on December
22, 2023, it is fixed, in effect, at 1.06900%) for a duration of five years, variable interest rate of 3-month JPY TIBOR
plus 0.30000% (by the interest swap agreement on December 22, 2023, it is fixed, in effect, at 0.69100%) for aduration of three years and variable interest rate of 1-month JPY TIBOR plus 0.20000% for a duration of oneyear), which was arranged by Mizuho Bank, Ltd. in order to pay a portion of the acquisition price and related
expenses for the acquisition of the six domestic hotels described in “(d) Overview of Acquisition of Assets”
with the equity financing described in the said (i).
Moreover, INV borrowed Term Loan (016) on September 14, 2023 (total amount borrowed: JPY 3,000 million;interest rate: variable interest rate of 3-month JPY TIBOR plus 0.40000% (by the interest swap agreement on
December 22, 2023, it is fixed, in effect, at 0.87900%) for a duration of four years), which was arranged by
Sumitomo Mitsui Banking Corporation in order to repay Term Loan (006) in the amount of JPY 3,000 million
due on September 14, 2023.
Furthermore, INV borrowed New Syndicate Loan (011) on September 26, 2023 and October 13, 2023 (total
amount borrowed: JPY 43,165 million; interest rate: variable interest rate of 3-month JPY TIBOR plus 0.50000%
for a duration of five years variable interest rate of 3-month JPY TIBOR plus 0.40000% (by the interest swap
agreement on December 22, 2023, it is fixed, in effect, at 0.89400%) for a duration of four years, variable interest
rate of 3-month JPY TIBOR plus 0.30000% (by the interest swap agreement on December 22, 2023, it is fixed, in
effect, at 0.69100%) for a duration of three years, variable interest rate of 1-month JPY TIBOR plus 0.20000% fora duration of one year, variable interest rate of 3-month JPY TIBOR plus 0.50000% for a duration of five years
and variable interest rate of 3-month JPY TIBOR plus 0.40000% (by the interest swap agreement on December
22, 2023, it is fixed, in effect, at 0.87900%) for a duration of four years), which was arranged by Mizuho Bank,
Ltd. and Term Loan (017) on September 26, 2023 (total amount borrowed: JPY 1,900 million; interest rate:variable interest rate of 3-month JPY TIBOR plus 0.50000% (by the interest swap agreement on December 22,
2023, it is fixed, in effect, at 1.05400%) for a duration of five years), which was arranged by The Tokyo Star Bank,
8

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)

Limited in order to repay New Syndicate Loan (J) in the amount of JPY 13,119 million, New Syndicate Loan(004) in the amount of JPY 28,571 million and Term Loan (007) in the amount of JPY 1,256 million due on
September 26, 2023 and New Syndicate Loan (H) in the amount of JPY 3,565 million due on October 13, 2023.
In addition, INV borrowed Term Loan (018) on November 29, 2023 (total amount borrowed: JPY 4,321 million;interest rate: variable interest rate of 3-month JPY TIBOR plus 0.60000% for a duration of six years), which wasarranged by Mizuho Bank, Ltd. in order to repay Term Loan (009) in the amount of JPY 4,321 million due on
November 29, 2023.
Additionally, a portion of INV’s existing loans (New Syndicate Loan (007)) from Sumitomo Mitsui Trust Bank,
Limited of JPY 1,746 million was transferred to The Chiba Bank, Ltd. in the amount of JPY 981 million on
September 29, 2023.

b. Issuance of Investment Corporation Bonds
INV issued investment corporation bonds as follows for the purpose of raising a portion of funds for repaymentof existing borrowings while at the same time lengthening the average maturity period of its debt and further
diversifying repayment dates for interest-bearing debt.
Bond Series

Issue Date

Issue
Interest Rate Redemption
AmountDate(JPY million) (annual rate)

Nineth Series Unsecured
Investment Corporation Bonds
September(with pari passu conditions among
21, 2023
specified corporate bonds)(green bonds)
Tenth Series Unsecured
Investment Corporation Bonds
December(with pari passu conditions among
14, 2023
specified corporate bonds)(green bonds)
(d)

1,700

1,800

Abstract

1.200%

September
21, 2028

Unsecured /Unguaranteed
Rating: A(JCR)

1.297%

December
14, 2028

Unsecured /Unguaranteed
Rating: A(JCR)Overview of Acquisition of Assets

CIM decided on the acquisition of trust beneficiary interests in six domestic hotels as follows on July 19, 2023, andacquisition of the assets was closed on August 1, 2023.
Acquisition
Price(JPY million)(Note 1)

Appraisal
Value(JPY million)(Note 2)

Fusaki Beach Resort Hotel& Villas40,29340,700

Sheffield Asset Tokutei
Mokuteki Kaisha

D85

Tateshina Grand HotelTakinoyu

8,365

8,450

Heijo Tokutei Mokuteki
KaishaD86

Hotel MyStays Okayama

2,613

2,640

Nippori Tokutei
Mokuteki Kaisha

D87

Hotel MyStays Aomori
Station

2,445

2,470

Shiretoko Tokutei
Mokuteki Kaisha

D88

Hotel MyStays Soga

2,039

2,060

Nippori Tokutei
Mokuteki Kaisha

D89

Tazawako Lake Resort &
Onsen

1,475

1,490

Heijo Tokutei Mokuteki
KaishaProperty
Number

Property Name

D84

9SellerFinancial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)

Property
Number

Property Name

Acquisition
Price(JPY million)(Note 1)

Appraisal
Value(JPY million)(Note 2)

57,23057,810Total(Note 1)
(Note 2)(e)Seller-Acquisition Price does not include adjustments for property taxes, city planning taxes, or nationalor local consumption taxes. Hereinafter the same shall apply.
Appraisal Value is based on appraisal value stated in the appraisal report by the Japan Real Estate
Institute., The Tanizawa Sōgō Appraisal Co., Ltd. or Daiwa Real Estate Appraisal Co., Ltd. on thevaluation date of June 1, 2023.

Overview of Results of Operations and Distributions

As a result of the operations mentioned above, operating revenues for the Reporting Period increased by
JPY 2,904 million from the previous period (+18.2%) to JPY 18,819 million, resulting in a net income of JPY
11,032 million, an increase of JPY 2,118 million from the previous period (+23.8%). Unappropriatedretained earnings including the retained earnings carried forward from the preceding fiscal period (JPY
8,657 million) is JPY 19,690 million. INV has decided to set the distribution per unit (excluding excess
profit distribution) of JPY 1,640, which is the net income per unit (JPY 1,637) plus the reversal of retained
earnings (JPY 3 per unit).
b

Outlook for the Fiscal Period Ending June 30, 2024

The Japanese economy is expected to continue its gradual recovery led by domestic demand. However,there are notable downside factors to the economy. In particular, high prices may restrain the growth of
personal consumption, and the rate of wage increases in the spring labor struggle (Shunto) will be a factor
that will determine the sustainability of the economic recovery in the future. Other factors, such as the
slowdown of overseas economies and supply constraints due to labor shortages, are also expected to affectthe tempo of economic recovery.
In the hotel market, demand in both the domestic/inbound and leisure/business segments is expected toremain stable.
In the rental housing market, the population outflow trend from central area caused by the impact of the
COVID-19 infection has recently turned into a population inflow trend again, which is expected to lead tohigher occupancy rates and higher unit rents in the future.

(a)

Future operational policy and issues to be addressed

Since July 2011, INV has focused on improving the profitability of its portfolio and strengthening its financialbase in order to enhance unitholder value with the Fortress Group as its sponsor. In addition to access to
Fortress’ global real estate expertise, INV will actively promote efforts to acquire new demand under theenvironment of "Post-Corona" and flexibly respond to changes in the external environment whileemphasizing customer safety and security. Going forward, INV will continue to implement various
strategies for further growth and financial stability, including the following measures.
Further external growth utilizing sponsor supportAsset recycling: property acquisitions using the proceeds from salesInternal growth at hotels through reducing costs, stimulating existing demand and creating new
demand by collaborating with hotel operators

Further internal growth at residential properties

Response to the risk or rising interest rate

Details of the future growth strategy are as follows.
10

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)(i)

External growth strategy
New Property Acquisitions
As its basic strategy, INV had moved forward with the acquisition of new properties focusing on hotels,
where continued growth in portfolio revenues would be anticipated, and residential properties, especiallywhere rental growth could be achieved, to build a portfolio with a good balance between growth andstability.
In regard to hotels, INV will take into consideration demands of business and leisure customers in nearby
areas, and leasing contract types when making investment decisions, with the aim of acquiring properties
where growth and stability of GOP and rental revenue are forecasted to increase.
In regard to residential properties, INV will analyze occupancy rates, rental market trends, the presenceof competing properties among other factors, and consider acquiring properties with strong
competitiveness, in which it believes it can achieve increases in rent.
Properties Acquired from affiliates of the Fortress Group (as of the date of this document)
Year

Properties acquired

Total acquisition price2012

24 residential properties (Note 1)

JPY 14,043 million (Note 1)

2014

20 hotels
14 hotels andthree residential properties (Note 2)
11 hotels andtwo residential properties

JPY 45,373 million

2015
2016

JPY 45,238 million (Note 2)
JPY 92,804 million

2017

six hotels andtwo residential properties (Note 3)

JPY 90,006 million (Note 3)

2018
2019

12 hotels
18 hotels (Note 4)

JPY 104,280 million
JPY 82,646 million (Note 4)

2020
2023

Two hotels
Six hotels

JPY 16,236 million
JPY 57,230 million

Total

120 properties(of which 89 are hotels and 31 areresidential properties)

JPY 547,858 million(of which hotels: JPY 496,220 million;
residential: JPY 51,638 million)(Note 1) Of the properties acquired from affiliates of the Fortress Group, 15 residential properties have been
sold.
(Note 2) Of the properties acquired from affiliates of the Fortress Group, one residential property has been
sold.
(Note 3) Of the properties acquired from affiliates of the Fortress Group, one residential property has beensold. Sheraton Grande Tokyo Bay Hotel was acquired through a special purpose company, of which
INV owns the preferred equity interest, and is counted as one property and INV’s investment amountof the preferred equity interest is counted as the acquisition price of the preferred equity interest.
(Note 4) The Cayman Hotels acquired by the Cayman SPC, of which INV owns the TK interest, are counted
as two properties and INV’s investment amount of the TK interest is used as the acquisition price of
the TK interest. After the Structure Change, INV currently has direct ownership of the Leasehold of
the Cayman Hotels.
Property Sales
INV considers the possibility of portfolio optimization upon consideration of the portfolio sector
composition, geographic distribution, and competitiveness of each property as appropriate.

(ii)

Strategy for internal growth(Hotels)11

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)

Of the 90 domestic hotels (Note 1) owned by INV as of the end of the Reporting Period, 82 hotels use avariable rent scheme. In the variable rent scheme, in principle, INV receives all of the gross operating
profit (GOP) after deducting payment of management fees for the hotel operator as rents. For 79 hotelsof the 82 hotels, MHM and subsidiaries of MHM have implemented sophisticated revenue management
initiatives seeking to maximize revenue through effectively taking in accommodation demand. As aresult, INV can directly enjoy the hotel revenue upside through this variable rent scheme.
In response to the reduction in hotel demand, the MHM Group is taking steps to reduce hotel operating
expenses and recover revenues by reviewing its operational strategy. During the recovery phase of hotel
demand in the future, INV will strive to minimize the impact of rising costs such as utility costs andfoodstuffs by means of a thorough review of staffing and work shifts, continuous efforts to reduce fixed
costs, and strategies to maximize GOPPAR (GOP per the number of rooms available for sale).
The MHM Group vigorously worked to stimulate demand from domestic customers by providing
corporate customers with diverse options including a new lineup of meeting options highlighting strictmeasures to reduce the spread of COVID-19 and various options including educational tours andemployee training while grasping changes in customer demand under the “Post-Corona” environment.
In addition, the MHM Group is focusing on creating demand, including continuation of delivery and takeout services and the development of new menus through directly managed restaurants in the hotel.
For hotels, renovation of rooms and replacement of fixtures and fittings are indispensable to maintain andincrease revenues and operate stably in a planned manner.
(Note 1) Including Sheraton Grande Tokyo Bay Hotel (the preferred equity interest).

(Residential properties and others)
INV will continue to strengthen its collaborative ties with property managers and brokers to further boost
occupancy rates and earning capabilities of its properties. With respect to INV’s residential properties,
INV will focus on increasing the occupancy rates and rents for both new lease contracts and lease renewals
for all its properties as well as formulating net leasing cost reduction policies in order to continue
maximizing profits.
Further, the implementation of appropriate maintenance and repair plans is of the utmost importance inmaintaining and enhancing the competitiveness and market value of the properties as well as ensuringhigh tenant satisfaction. Therefore, INV will continue to monitor current strategic plans with flexible
implementation as it sees fit.
(iii) Financial strategy
INV will continue to extend the average interest-bearing debt repayment periods, diversify the loan
maturity dates and diversify financing measures while paying attention to fund procurement costs, as wellas maintaining an appropriate fixed interest rate ratio to mitigate the risk of rising interest rates.
In addition, INV will seek to improve the credit rating (the long-term issuer rating “A” (Outlook: Positive))
obtained from Japan Credit Rating Agency, Ltd. (JCR) by proceeding with these measures.
(iv)

Compliance risk management
While the executive director of INV concurrently serves as the representative director at CIM, two
supervisory directors (an external attorney and an external certified public account) oversee the execution of
the executive director’s duties via the Board of Directors of INV.
CIM has a compliance officer who is responsible for compliance with laws, regulations and other relevant
matters as well as overall management of transactions with sponsor related parties. Moreover, it has inplace a compliance committee which, chaired by such compliance officer, is in charge of deliberating on
compliance with laws, regulations and other relevant matters as well as transactions with sponsor relatedparties. Compliance committee meetings are attended by an outside expert (an attorney) who, sitting in as
a compliance committee member, conducts rigorous deliberations on the existence of conflicts of interest intransactions with sponsor related parties as well as strict examinations with respect to INV’s compliance
12Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)

with laws and regulations. No resolution will be adopted unless the outside expert agrees.
When INV conducts certain transactions such as asset acquisition from sponsor related parties, priorapprovals by the Board of Directors of INV are required to ensure an objectivity in deliberation regarding
conflicts of interests. In such agenda, only two supervisory directors (a lawyer and a certified public
accountant) will participate in the vote, and the executive director who concurrently serves as therepresentative director of CIM will not participate in the vote as he is a special interested party.
INV intends to continually take steps to strengthen its compliance structure.
(v)

Initiatives for Sustainability
INV and CIM recognize the importance of environmental, social, and governance (ESG) considerations
in real estate investment management from the viewpoint of sustainability such as economic and social
development and contributing to global environmental conservation, and regard improvement ofsustainability as an important management issue. INV and CIM believe that the incorporation of ESG
considerations into the real estate investment management business, which is our primary business, isessential to maximizing unitholder value over the medium to long term and contributes to maximizing
INV's investment returns.
Thus, INV and CIM have established a “Sustainability Policy” to set basic policies for sustainability andput them into practice in our daily operations.
Under this policy, CIM has formulated the “Energy Conservation Policy”, the “Greenhouse Gas
Emissions Reduction Policy”, the “Water Saving Policy” and the “Waste Management Policy” which
stipulate efforts to reduce environmental impact as initiatives for environment. In addition, CIM has
established the “Sustainable Procurement Policy” in order to promote initiatives for ESG throughout thevalue chain of INV's real estate portfolio and concluded the “Green Lease” contract with tenants tocollaborate with tenants on measures related to the environmental consideration of real estate, such asproactive introductions of energy-saving equipment such as LED lighting.
Furthermore, as of the date of this document, INV acquired CASBEE Certification for Buildings (Existing
Buildings) for two hotels, and Certification for CASBEE for Real Estate for two residential properties.
CASBEE is a method that comprehensively assesses the quality of a building, and evaluates features suchas interior comfort and scenic aesthetics, in consideration of environment practices including use ofmaterials and equipment that save energy or achieve smaller environmental loads. Also, as of the dateof this document, 19 hotels owned by INV acquired the certification of Building-Housing Energyefficiency Labeling System (“BELS”). In particular, Hotel MyStays Premier Akasaka, Hotel MyStays
Fukuoka Tenjin, Hotel MyStays Yokohama Kannai Hotel MyStays Oita, Hotel MyStays Haneda andHotel MyStays Matsuyama have been rated five stars “★★★★★” due to high energy conservation
performance.
Following the acquisition of environmental certifications for its properties, INV issued green bonds in
September 2023 and December 2023 to further promote its sustainability initiatives and to strengthen its
fund-raising base by expanding the investor base interested in ESG investment.
As initiatives for society, CIM is working on various measures for tenants and CIM’s officers andemployees. CIM conducts the “Tenant Satisfaction Survey” for residents of INV’s residential properties
to collect opinions and requests of residents and utilize them for asset management, and provides
sustainability-focused training for all officers and employees at least once a year to help officers andemployees acquire knowledge and raise awareness of sustainability considerations in line with businesspractices. Moreover, as initiatives for CIM’s employees, CIM conducts an employee satisfaction survey
once every three years with the aim of improving its working environment, and gives full subsidy for acomprehensive medical checkup without age restrictions.
As a result of other sustainability promotion activities, INV received a "3-Star" rating in the 2023 GRESBReal Estate Assessment, an international benchmark assessment that measures ESG integration of realestate companies and funds, on a five-level rating scale, and an "A level" in the GRESB Public Disclosure
assessment, the highest rating.
13

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)

INV will continue to recognize its social responsibility to the environment and local communities as a JREIT with hotels and residences as our core assets, and will proactively implement ESG-friendly
investment management and sustainability initiatives that take advantage of asset characteristics andcarry out social contribution activities.

14

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)c

Significant Subsequent Events
Not applicable. Reference information is stated below.

(Reference Information)(a)Debt Financing
INV has decided to execute new borrowings (New Syndicate Loan (012) and Term Loan (019)) on January
12, 2024 and borrowed on January 16, 2024 and January 24, 2024 in order to repay one of the tranches of
New Syndicate Loan (M) in the amount of JPY 5,796 million, one of the tranches of New Syndicate Loan
(L) in the amount of JPY 4,805 million, New Syndicate Loan (N) in the amount of JPY 3,544 million and
New Syndicate Loan (006) in the amount of JPY 10,408 million due on January 16, 2024 and Term Loan
(010) in the amount of JPY 1,550 million, Term Loan (011) in the amount of JPY 1,700 million and Term
Loan (012) in the amount of JPY 6,800 million due on January 24, 2024.

New Syndicate Loan (012)
LenderBorrowing
Date

Outstanding
Balance(JPY million)

Interest Rate

Maturity

Borrowing(annual rate)

Date

MethodVariableResona Bank, Limited

January 16, 2024

1,200 interest rate
(Note 1)
Variable

SBI Shinsei Bank, Limited

January 16, 2024

369 interest rate
(Note 2)

March 16,2025
March 14,2027

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

Variable
January 16, 2024

5,308 interest rate

Bank, Limited(Note 3)

March 14,
2028

Aozora Bank, Ltd.
The Nomura Trust andUnsecured/

Banking Co., Ltd.

non guarantee

MUFG Bank, Ltd.
Sumitomo Mitsui Trust

Variable
January 24, 2024

5,025 interest rate

Bank, Limited(Note 3)

March 14,2028

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

Variable
January 16, 2024

5,406 interest rate
(Note 4)Development Bank ofJapan, Inc.
The Nomura Trust andBanking Co., Ltd.

15

March 14,2029

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)

MUFG Bank, Ltd.

Variable

Sumitomo Mitsui Trust

January 24, 2024

5,025 interest rate

Bank, Limited(Note 4)

(green loan)
Mizuho Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust
Bank, Limited
Development Bank ofJapan, Inc.
San ju San Bank, Ltd.

March 14,2029

Unsecured/
Variable
January 16, 2024

8,970 interest rate
(Note 5)

March 14,

non guarantee

2030

The Nomura Trust andBanking Co., Ltd.
Total Debt

31,303(Note 1) 1-month JPY TIBOR (Base Rate) + spread (0.20000%)(Note 2) 3-month JPY TIBOR (Base Rate) + spread (0.30000%)(Note 3) 3-month JPY TIBOR (Base Rate) + spread (0.40000%)(Note 4) 3-month JPY TIBOR (Base Rate) + spread (0.50000%)(Note 5) 3-month JPY TIBOR (Base Rate) + spread (0.60000%)
Term Loan (019)
Lender

The Tokyo Star Bank,
Limited

Borrowing
Date

Outstanding
Balance(JPY million)

Interest Rate

Maturity

Borrowing(annual rate)

Date

MethodMarch 14,

Unsecured/2029

non guarantee

Variable
January 16, 2024

2,440interest rate
(Note 1)

(Note 1) 3-month JPY TIBOR (Base Rate) + spread (0.50000%)(b)

Issuance of Investment Corporation Bonds
INV issued investment corporation bonds to individual investors as follows for the purpose of raising a
portion of funds for repayment of existing borrowings while at the same time lengthening the average
maturity period of its debt and further diversifying repayment dates for interest-bearing debt.
Bond Series

Issue Date

Issue
Interest Rate Redemption
AmountDate(JPY million) (annual rate)

Eleventh Series Unsecured
Investment Corporation Bonds(with pari passu conditions among
investment corporate bonds)

February
9, 2024

February 9,
2029

6,000

16

1.470%

Abstract
Unsecured /Unguaranteed
Rating: A(JCR)Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)d

Operational Outlook

The forecasts of financial results for the fiscal periods ending June 30, 2024 (from January 1, 2024 to June 30,2024) and December 31, 2024 (from July 1, 2024 to December 31, 2024) are as follows.
June 2024
Fiscal Period(Anticipated)

December 2024
Fiscal Period(Anticipated)

Operating Revenues

JPY 20,199 million

JPY 20,255 million

Operating Income

JPY 13,717 million

JPY 13,509 million

Ordinary Income

JPY 11,887 million

JPY 11,699 million

Net Income

JPY11,886 million

JPY 11,698 million

Total Distribution Amount(Including excess profit distribution)

JPY 11,904 million

JPY 11,715 million

Net Income per Unit

JPY 1,764

JPY 1,736

Distribution per Unit
(Excluding excess profit distribution)

JPY 1,767

JPY 1,739--

JPY 1,767

JPY 1,739

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

For the assumptions underlying the operational outlook for the fiscal periods ending June 30, 2024 andDecember 31, 2024, please see “Assumptions Underlying the Forecast of Financial Results and Distribution for
the Fiscal Periods ending June 30, 2024 and December 31, 2024” as follows.
(Cautionary Note regarding Forward Looking Statements)
Forward looking statements such as the forecasts set forth herein are based on information currently available
and certain assumptions that are deemed reasonable. Actual operating performance may vary significantly
due to factors not foreseen as of the date of this document, such as the occurrence of gains and losses associatedwith the sale of properties, repayment of borrowings and a decrease in rent received. Also, this forecast is
not a guarantee of distribution amounts.

17

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)<Assumptions Underlying the Forecast of Financial Results and Distribution for the Fiscal Periods
ending December 31, 2023 and June 30, 2024 >Item

Assumptions

The June 2024 Fiscal Period: from January 1, 2024 to June 30, 2024 (182 days)
Fiscal period

Assets undermanagement

The December 2024 Fiscal Period: from July 1, 2024 to December 31, 2024 (184 days)

Properties held as of the end of the December 2024 Fiscal Period: 133 properties and preferred
equity interests in one TMK
Based on the properties held as of today (133 properties and preferred equity interests in one TMK),
and INV assumes that there will be no change in the portfolio through the end of the fiscal period
ending December 2024.

As of the end of the December 2024 Fiscal Period: 6,737,121 units
Units outstanding

INV assumes that there will be no change to the current 6,737,121 units issued and outstanding
through the end of the December 2024 Fiscal Period.
Balance as of the end of the June 2024 Fiscal Period: JPY 271,154 million (borrowing: JPY 250,254
million, investment corporation bonds: JPY 20,900 million)
Balance as of the end of the December 2024 Fiscal Period: JPY 265,154 million (borrowing: JPY
245,254 million, investment corporation bonds: JPY 19,900 million)

Interest-bearing
liabilities

INV assumes that of the current total balance of JPY 274,240 million, INV intends to repay the
consumption tax loan of JPY 3,086 million maturing on August 1, 2024 in the fiscal period ending
June 2024. INV assumes that the proceeds (JPY 6,000 million) from the 11th series unsecured
corporate bonds, issued on February 9, 2024, will be used to repay or redeem loans of JPY 5,000
million and investment corporation bonds of JPY 1,000 million maturing during the December 2024
Fiscal Period. Regarding other loans maturing during the June 2024 Fiscal Period and December
2024 Fiscal Period, INV intends to refinance the same amount during the respective fiscal periods.
INV assumes no other new loan or prepayment of loan through the end of the December 2024
Fiscal Period.

18

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)

INV expects to record rental revenues for the fiscal periods as follows:
June 2024
December 2024
Fiscal Period
Fiscal Period
JPY 14,603 million
JPY 17,617 million(JPY 12,836 million)(JPY 15,865 million)(JPY 5,853 million)(JPY 7,623 million)(JPY 6,982 million)(JPY 8,241 million)
JPY 4,363 million
JPY 1,958 million(USD 32,325 thousand) (USD 14,506 thousand)
JPY 1,231 million
JPY 679 million
JPY 20,199 million
JPY 20,255 million

・Rental revenues(of these, hotel rents)(Fixed hotel rents)(Variable hotel rents)
・Management contract revenue
・TMK dividend amount
Total operating revenues

In the 2024 forecasts, INV has conservatively factored in a marginal rebound in domestic demandfollowing the end of the "National Travel Discount Campaign" program.
With regard to inbound demand, we assume that the number of Chinese tourists will recover to2019 levels in the spring of 2024.
Operating revenues

In addition to the demand forecasts above, INV has taken into account various factors including
scheduled conferences, concerts and other events in the vicinity of each hotel, trends at competing
hotels, and price trends, to forecast hotel rents for the period ending June 2024 and thereafter. The
reservations already made for January 2024 as of the forecast are also taken into account.
INV estimates the amount of dividends on the preferred equity interests based on the performanceof the underlying asset and the assumed amount of expenses incurred by the TMK.
INV recognizes management contract revenue from the overseas hotels as real estate investment
income from management contracts of the Cayman Hotels. The forecasts of management contract
revenue are based on estimated performance of the overseas hotels and the assumed amount ofexpenses incurred by the hotel management company. Management contract revenues for
January to December 2024 have been conservatively calculated based on exchange rate of USD 1 =JPY 135, and the foreign currency risk on the management contract revenues are partially hedged
by foreign exchange forward contracts. INV plans to implement a renovation work at Sunshine
Suites Resort beginning in the autumn of 2024, and we expect a decline in revenue in the fiscal
period ending December 2024, due to partial sales stoppage during such renovation. While INV
is considering the expansion and renovation of Westin Grand Cayman Seven Miles Beach & Resort,details are yet to be determined. Therefore, INV does not anticipate or incorporate any particularimpact of the expansion and renovation for the purpose of this forecast through the end of the fiscal
period ending December 2024.
In addition, INV assumes there will be no delinquencies or non-payment of rent by other tenants.
INV expects to incur property related expenses out of operating expenses for the fiscal periods asfollows:

Operating expenses

・Facility management fees(of these, repair costs)
・Taxes and other public charges
・Insurance expenses
・Depreciation expenses
・Other expenses
Total property related expenses andmanagement contract expenses

June 2024
Fiscal Period
JPY 458 million(JPY 22 million)
JPY 649 million
JPY 266 million
JPY 4,316 million
JPY 123 million

December 2024
Fiscal Period
JPY 468 million(JPY 25 million)
JPY 841 million
JPY 297 million
JPY 4,373 million
JPY 100 million

JPY 5,814 million

JPY 6,080 million

INV expects to incur other operating expenses than the property related expenses or management
contract expenses for the fiscal periods as follows:・Other operating expenses

June 2024
Fiscal Period
JPY 667 million

December 2024
Fiscal Period
JPY 664 million(of these, asset management fees)(JPY 450 million)(JPY 450 million)

19

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)

INV expects to record net operating income for the fiscal periods as follows:

NOI

June 2024
Fiscal Period

December 2024
Fiscal Period・NOI

JPY 18,701 million

JPY 18,547 million(of these, domestic hotel NOI)(of these, overseas hotel NOI)(of these, residential NOI)(JPY 13,404 million)(JPY 4,092 million)(JPY 1,127 million)(JPY 15,694 million)(JPY 1,651 million)(JPY 1,124 million)

NOI calculation method in the above table is as follows
・NOI ＝ Rental Revenues ‐ Property Related Expenses + Depreciation Expenses + Dividends
on the preferred equity interest (TMK dividend) + (Management Contract Revenue ‐Management Contract Expense)
INV expects to incur non-operating expenses for the fiscal periods as follows:

Non-operating
expenses・Interest expense
・Finance related costs・Interest for investment corporation bonds
・Depreciation of investment corporation
bonds issuance expenses
・Foreign exchange loss (Note 1)
Total non-operating expenses

June 2024
Fiscal Period
JPY 1,053 million
JPY 564 million
JPY 103 million

December 2024
Fiscal Period
JPY 1,066 million
JPY 575 million
JPY 114 million

JPY 14 million

JPY 15 million

JPY 93 million
JPY 1,830 million

JPY 39 million
JPY 1,810 million

The distribution per unit is calculated in accordance with the cash distribution policy as set forthin INV’s Articles of Incorporation.
With respect to the distribution for the fiscal period ending June 2024, INV expects to distribute anaggregate amount of JPY 11,904 million (distribution per unit: JPY 1,767) from the net income forthe fiscal period ending June 2024 (JPY 11,886 million) including the JPY 17 million reversal ofretained earnings (internal reserve).

Distribution perunitWith respect to the distribution for the fiscal period ending December 2024, INV expects todistribute an aggregate amount of JPY 11,715 million (distribution per unit: JPY 1,739) from the net
income for the fiscal period ending December 2024 (JPY 11,698 million) including the JPY 17 million
reversal of retained earnings (internal reserve).
For the fiscal periods ending June 2024 and December 2024, INV expects to record a deferred gain
on hedge of the interest rate swap as the valuation and conversion adjustments, etc. of JPY 4 million,
which is equal to the amount for the fiscal period ended June 2023. The distribution per unit iscalculated based on the assumption that the fluctuation of the market value of the interest rate
swap does not affect the distribution per unit and earnings per unit.
Distribution per unit may vary due to various factors, including changes in the assets undermanagement, fluctuation of rent income associated with reasons such as change of tenants andoccurrences of unexpected repairs.

20Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)

INV believes maintaining the stability of cash distributions over the medium term is an importantfactor in determining the amount of distribution for a given fiscal period, and therefore, INV has
adopted the policy to make distributions in excess of profits or reversal of retained earnings(“distributions in excess of profits, etc.” together with distributions in excess of profits hereinafter)in order to stabilize distributions, in cases where a dilution of investment units or significant
expenses are to be recorded in connection with, among other things, the acquisition of assets or theraising of capital, leading to a temporary decrease in distribution per unit, taking into consideration
the level of distribution per unit assuming such acquisition of assets or capital raising had
contributed for a full fiscal period.

Excess profit
distribution per unit

INV may also consider making distributions in excess of profits for the purpose of reducing theimpact from a corporate tax increase arising from different rules in tax and accounting practices,such as treatment on depreciation of fixed term land lease or asset retirement obligation.
With respect to the fiscal period ending June 2024, INV plans to distribute the reversal of retained
earnings (internal reserve) (JPY 3 per unit) as “distributions in excess of profit for the difference
arising from the difference between tax and accounting treatment.”
With respect to the fiscal period ending December 2024, INV plans to distribute reversal of retained
earnings (internal reserve) (JPY 3 per unit) as “distributions in excess of profit for the difference
arising from the difference between tax and accounting treatment.”
June 2024
Fiscal Period
Excess profit distribution per unit

December 2024
Fiscal Period--

INV assumes there will be no amendments to applicable laws and regulations, the taxation system,
accounting standards and other regulations that would affect the foregoing forecasts.
Other

(2)

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

Investment Risk

Disclosure is omitted because there have been no material changes in the “Investment Risk” section of the latest
securities report (filed on September 26, 2023).

21

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)

2. Financial Statements(1)

Balance Sheet(Unit: JPY thousand)Fiscal period ended
June 30, 2023
(as of June 30, 2023)

AssetsCurrent assets:
Cash and bank deposits
Cash and bank deposits in trust
Rental receivables
Deposits paid
Prepaid expenses
Income taxes receivable
Consumption tax receivable
Other
Total current assets
Non-current assets:
Property and equipment
Buildings at cost
Accumulated depreciation
Buildings, net
Buildings and accompanying facilities, at cost
Accumulated depreciation
Buildings and accompanying facilities, net
Structures, at cost
Accumulated depreciation
Structures, net
Tools, furniture and fixtures, at cost
Accumulated depreciation
Tools, furniture and fixtures, net
Construction in progress
Buildings in trust, at cost
Accumulated depreciation
Buildings in trust, net
Buildings and accompanying facilities in trust, at cost
Accumulated depreciation
Buildings and accompanying facilities in trust, net
Structures in trust, at cost
Accumulated depreciation
Structures in trust, net
Tools, furniture and fixtures in trust, at cost
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Construction in progress in trust
Total property and equipment, net
Intangible assets
Leasehold rights
Leasehold rights in trust
Total intangible assets
Investments and other assets
Investment securities
Guarantee deposits
Long-term prepaid expenses
Derivatives assets
Other
Total investments and other assets
22

Fiscal period ended
December 31, 2023
(as of December 31, 2023)

18,377,030
10,464,171
5,750,301
542,947
821,11715
397
35,955,980

21,956,120
12,936,394
4,834,083
1,976,184
1,143,417
21
2,615,543
12,63645,474,401

19,479,753-1,807,607
17,672,145
5,311,502-1,260,171
4,051,330
1,458
-216
1,242
1,282,552-474,151
808,401
720,331
159,247,341-28,861,119
130,386,221
33,186,709-13,472,710
19,713,998
266,849-115,188
151,661
3,370,722-1,995,319
1,375,402
241,319,447
25,767416,225,951

19,484,168-2,026,919
17,457,249
5,311,876-1,413,713
3,898,162
1,458
-249
1,209
1,365,816-543,189
822,627754,330
184,088,728-31,362,709
152,726,019
40,943,104-14,493,714
26,449,389
281,528-121,916
159,6113,767,991-2,200,871
1,567,120
264,666,397
198,056
468,700,175

10,637,811
14,380,825
25,018,637

10,637,811
17,396,611
28,034,422

17,856,387
1,372,719
290,589
9,306
22,667
19,551,670

17,856,387
1,382,359
1,825,986
7,877
22,66721,095,278

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)(Unit: JPY thousand)Fiscal period ended
June 30, 2023
(as of June 30, 2023)
460,796,259

Fiscal period ended
December 31, 2023
(as of December 31, 2023)
517,829,876

67,69067,690496,819,930

88,78388,783563,393,061

Accounts payable
Short-term loans payable

599,562
111,453,000

800,491
36,520,000

Current portion of investment corporation bonds
Current portion of long-term loans payable

2,000,000
46,139,000

1,000,000
36,787,000

Accounts payable-otherAccrued expenses

3,514
247,9036,321
281,210

Income taxes payable
Consumption taxes payable605
422,723

605-

Advances received
Deposits received

305,914
11,663

305,676
55,107

161,183,886

75,756,412

Investment corporation bonds
Long-term loans payable

11,400,000
68,198,000

13,900,000
180,893,000

Tenant leasehold and security deposits in trust
Derivatives liabilities

1,484,328
495,525

1,491,055
654,369

Asset retirement obligations
Total non-current liabilities

34,097
81,611,951

393,202
197,331,627

242,795,838

273,088,040

Unitholders’ equity:
Unitholders’ capital

235,701,512

270,101,249

Surplus:Capital surplus

6,264,432

6,264,432

Total non-current assets
Deferred assets
Investment corporation bond issuance costs
Total deferred assets
Total assets
Liabilities
Current liabilities:

Total current liabilities
Non-current liabilities:

Total liabilities
Net assets

Deduction of capital surplus
Allowance for temporary differences
adjustment
Other deduction of capital surplus
Total deduction of capital surplus*2

Capital surplus (net)
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*1

Total liabilities and net assets-6,130-6,130-5,524,006-5,530,137-5,524,006-5,530,137

734,294
17,583,734

734,294
19,690,532

18,318,029
254,019,541

20,424,826
290,526,075

4,550-221,054

4,550
254,024,091
496,819,930

23

*2

*1

-221,054
290,305,021
563,393,061

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)(2)

Statement of Income and Retained Earnings(Unit: JPY thousand)Fiscal period ended
June 30, 2023
(from January 1, 2023 toJune 30, 2023)

Operating revenue
Rental revenue―real estate

12,000,955*1Management contract revenue

3,914,026*2

Total operating revenue

Fiscal period ended
December 31, 2023
(from July 1, 2023 to
December 31, 2023)
16,696,076*1

18,819,119

15,914,981

Operating expenses
Property related expenses

4,488,341*1

Management contract expenses
Asset management fees*2649,329300,000

2,123,042*2

5,096,717*1*2

734,722300,000

Directors’ compensation
Asset custody fees

4,800
24,736

5,200
27,267Administrative service fees
Other39,162
51,871

48,537
17,761

5,558,241
10,356,739

6,230,207
12,588,912

Total operating expenses
Operating income
Non-operating income
Interest income

100

138

Foreign exchange gains
Miscellaneous income

178,1853,821

314

Total non-operating income
Non-operating expenses

182,107452

Interest expenses
Foreign exchange losses

507,601-

603,172
76,288Interest expenses on investment corporation bonds
Amortization of investment corporation bond issuance costs

33,881
7,053

63,05910,839Loan-related costs
Derivative losses

538,693537,269

620,370
30,0781,624,499

152,379
1,556,188

8,914,347
8,914,347

11,033,176
11,033,176

605
605

605
605

Net income
Retained earnings carried forward

8,913,742
8,669,991

11,032,571
8,657,960

Unappropriated retained earnings

17,583,734

19,690,532

Investment unit issuance costs
Total non-operating expenses
Ordinary income
Income before income taxes
Income taxes
Total income taxes

24Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)(3)

Statement of Changes in Net Assets

Fiscal period ended June 30, 2023 (from January 1, 2023 to June 30, 2023)(Unit: JPY thousand)Unitholders’ equity
SurplusCapital surplus
Unitholders’capitalDeduction of capital surplus
Capital surplus

Balance at the
beginning of theperiodChanges during theperiodDistributions fromsurplus

Allowance fortemporarydifferences
adjustment

Other
deduction ofcapital surplus

Total
deduction ofcapital surplus

Capital surplus(net)

235,701,512

6,264,432-6,130-5,524,006-5,530,137

734,294

－

－

－

－

－

－

235,701,512

6,264,432-6,130-5,524,006-5,530,137

734,294

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

Valuation and translation
adjustments

Unitholders’ equity
SurplusRetainedearnings(deficit)
Balance at the
beginning of theperiodChanges during theperiodTotal
surplusTotal
unitholders’equityDeferred
gains or losses
on hedges

Totalvaluation andtranslation
adjustments

142,721

142,721Total
net assets

13,742,562

14,476,857

250,178,369

Distributions fromsurplus-5,072,570-5,072,570-5,072,570-5,072,570

Net income

8,913,742

8,913,742

8,913,742

8,913,742

Changes other thanunitholders’ equity(net)
Total changes during
the period
Balance at the end of
the period

250,321,091-138,171-138,171-138,171

3,841,171

3,841,171

3,841,171-138,171-138,1713,703,000

17,583,734

18,318,029

254,019,541

4,550

4,550

254,024,091

25

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)

Fiscal period ended December 31, 2023 (from July 1, 2023 to December 31, 2023)(Unit: JPY thousand)Unitholders’ equity
SurplusCapital surplus
Unitholders’capitalDeduction of capital surplus
Allowance fortemporarydifferences
adjustment

Other
deduction ofcapital surplus

Total
deduction ofcapital surplus

Capital surplus(net)

6,264,432-6,130-5,524,006-5,530,137

734,294

34,399,737

－

－

－

－

－

270,101,249

6,264,432-6,130-5,524,006-5,530,137

734,294

Capital surplus

Balance at the
beginning of theperiodChanges during theperiodIssuance of new
investment units
Distributions fromsurplus235,701,512

34,399,737

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

Valuation and translation
adjustments

Unitholders’ equity
SurplusRetainedearnings(deficit)
Balance at the
beginning of theperiodChanges during theperiodIssuance of new
investment units
Distributions fromsurplus
Net income
Changes other thanunitholders’ equity(net)
Total changes during
the period
Balance at the end of
the period

17,583,734

Total
surplus18,318,029

Total
unitholders’equityDeferred
gains or losses
on hedges

Totalvaluation andtranslation
adjustments

254,019,541

4,550

4,550

Total
net assets

254,024,091

34,399,737

34,399,737-8,925,773-8,925,773-8,925,773-8,925,773

11,032,571

11,032,571

11,032,571

11,032,571-225,605-225,605-225,605

2,106,797

2,106,797

36,506,534-225,605-225,605

36,280,929

19,690,532

20,424,826

290,526,075-221,054-221,054

290,305,021

26

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)(4) Statement of Cash Distribution(Unit: JPY)
Fiscal period ended June 30, 2023
(as of June 30, 2023)

Fiscal period ended December 31, 2023
(as of December 31, 2023)

I

Unappropriated retained
earnings

17,583,734,499

19,690,532,049

II

Distributions

8,925,773,760

11,048,878,440(1,464)(1,640)Retained earnings (deficit)
carried forward

8,657,960,739

8,641,653,609

Calculation method of distribution
amountIn accordance with the distribution policy set

In accordance with the distribution policy set

forth in Article 17, Paragraph 1 of the Articles

forth in Article 17, Paragraph 1 of the Articles

of Incorporation of INV, the distributionof Incorporation of INV, the distribution

amount shall be the amount which does notamount shall be the amount which does notexceed the amount of profits but exceeds

exceed the amount of profits but exceeds

90% of the distributable profit as defined in

90% of the distributable profit as defined in

ArticleArticle(Distribution per unit)
III

67-15

Measures Act.

of theSpecialTaxation

However, in the event that

67-15

Measures Act.

of theSpecialTaxation

However, in the event thatany tax losses arise, or if no profits have been

any tax losses arise, or if no profits have beenrecorded for tax purposes due to tax losses

recorded for tax purposes due to tax losses

carried forward, the distribution amountcarried forward, the distribution amount

may be as reasonably determined by INV.

may be as reasonably determined by INV.

Pursuant to this policy, INV determined the

Pursuant to this policy, INV determined the

distribution amount to be JPY 8,925,773,760

distribution amount to be JPY 11,032,571,310

out of net income of JPY 8,913,742,601 andout of net income of JPY 11,048,878,440 andretained earnings carried forward of JPY

retained earnings carried forward of JPY

12,031,159.

16,307,130.

27

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)(5)

Statement of Cash Flows(Unit: JPY thousand)Fiscal period ended
June 30, 2023
(from January 1, 2023 toJune 30, 2023)

Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Investment unit issuance costs
Amortization of investment corporation bond issuance costs
Loan-related costs
Interest income
Interest expenses
Foreign exchange losses (gains)
Loss (gain) of derivatives
Decrease (increase) in rental receivables
Decrease (increase) in deposits paid
Decrease (increase) in receivable income taxes
Decrease (increase) in consumption taxes receivable
Increase (decrease) in accounts payable
Increase (decrease) in consumption taxes payable
Increase (decrease) in accrued expenses
Increase (decrease) in advances received
Increase (decrease) in deposits received
Others, net
SubtotalInterest income received
Interest expenses paid
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities
Proceeds from time deposits
Purchases of property and equipment
Purchases of property and equipment in trust
Purchases of leasehold rights in trust
Repayments of tenant leasehold and security deposits in trust
Proceeds from tenant leasehold and security deposits in trust
Payment of tenant leasehold and security deposits
OthersNet cash used in investing activities
Cash flows from financing activities
Increase in short-term loans payable
Repayments of short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from issuance of investment corporation
bonds
Redemption of investment corporation bonds
Borrowing related expenses redemption
Payment of distributions of earnings
Proceeds from issuance of investment units
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

28

Fiscal period ended
December 31, 2023
(from July 1, 2023 to
December 31, 2023)

8,914,347
3,746,513
7,053
538,693-100
541,482-90
537,269-905,138
1,160,368-1
13,731
51,048-19,097-11,435-1,827-250,984
14,321,833
100-538,660-605
13,782,668

11,033,176
4,217,991
152,379
10,839620,370-138
666,23123
30,078916,217-1,433,237-5-3,038,267-3,4468,353-238
43,443
193,803
13,417,575
138-643,780-605
12,773,327

2,000,000-62,318-965,159-30,246
28,873-46,500
924,648

800,000-122,052-55,967,444-3,055,022-33,591
40,318-9,640-95,410-58,442,843

27,660,000-30,722,000
12,317,000-16,062,000

11,899,000-86,832,000
129,686,000-26,343,000

6,163,101

3,470,368-1,000,000-473,134-5,070,967-7,188,001
90
7,519,406
20,521,796*1 28,041,202-2,000,000-2,684,150-8,922,722
34,247,357
52,520,852-23
6,851,312
28,041,202*1 34,892,514

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)(6)

Notes Concerning Going Concerns Assumption
Not applicable(7)

Notes Concerning Significant Accounting Policies(Notes Concerning Significant Accounting Policies)
1. Evaluation standards and evaluation method of assets(a) Investment in affiliates
Cost method through moving-average method is used.
(b) Claims generated and debt incurred through derivative transactions
Market value method is used.
2. Method of depreciation of non-current assets(a) Property and equipment (including assets in trust)The straight-line method is used.
The useful lives of major property and equipment are as follows.
Buildings
16-50 years
Buildings and accompanying facilities
5-29 years
Structures
20 years
Tools, furniture and fixtures
3-18 years
Buildings in trust
5-67 years
Buildings and accompanying facilities in trust 3-33 years
Structures in trust
7-55 years
Tools, furniture and fixtures in trust
3-20 years(b) Intangible assets
For fixed-term land lease for business purposes in Japan, the straight-line method based on the lease period
is used.
(c) Long-term prepaid expenses
The straight-line method is used.
3. Accounting treatment of deferred assets
Investment corporation bond issuance costs
Investment corporation bond issuance costs are amortized using the straight-line method over a period up to
redemption of the investment corporation bonds.
4. Method of calculating allowances
Allowance for doubtful accounts
To reserve for losses on doubtful accounts, allowances are provided for normal receivables using a rate
determined based on past bad debt experiences, and specific allowances are provided for accounts with apossibility of default based on the estimated amounts considered to be uncollectible by considering thecollectability of accounts on an individual basis.
5. Conversion of assets and liabilities in foreign currency into Japanese yen
Receivables and payables denominated in foreign currencies are translated into yen at the spot exchange rate
at the end of the fiscal period date, and differences arising from the translation are treated as a profit or loss.

29

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)

6. Revenue and expense recognition(a) Accounting treatment of property taxes and other taxes
With respect to property taxes, city planning taxes and depreciable asset taxes, of the tax amount assessedand determined, the amount corresponding to the Reporting Period is accounted for as property related
expenses.
Of the amounts paid to the seller for acquisitions of real estate, the amount equivalent to property taxes iscapitalized as part of the acquisition cost of the real estate instead of being charged as expense. The amountequivalent to property taxes that was capitalized as part of the acquisition cost of real estate during theReporting Period is JPY 59,935 thousand.
(b) Recognition of revenue
The following is the content of principal performance obligations related to revenue from contracts with
INV’s customers and the normal timing for the satisfaction of such obligations (normal timing for revenue
recognition).
Sale of real estate, etc.
For the sale of real estate, etc., revenue will be recognized at the time the control of such real estate, etc. is
obtained by the purchaser, who is the customer, as the transfer obligation will be fulfilled pursuant to thecontract pertaining to the sale of real estate.
7. Method of hedge accounting(a) Method of hedge accounting
Deferred hedge accounting is used.
(b) Hedging instrument and hedged item
Hedging instrument: interest rate swap
Hedged item: interest on borrowings(c) Hedge policy
INV enters into derivative transactions for the purpose of hedging against the risks set forth in INV’s Articles
of Incorporation in accordance with its risk management policy.
(d) Method of evaluating hedge effectivenessHedge effectiveness is evaluated by comparing the cumulative amount of changes in cash flows of thehedging instrument and the cumulative amount of changes in cash flows of the hedged item and verifying
the difference in the amounts of change of both the hedged item and the hedging instrument.
8. Cash and cash equivalents as stated in Statement of Cash Flows
Cash and cash equivalents as stated in the Statement of Cash Flows consist of cash on hand and cash intrust, floating deposits, deposits in trust and short-term investments that are very liquid and realizable witha maturity of three months or less when purchased and that are not subject to significant risks of changes
in value.

30

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)

9. Other matters which constitute the basis for preparation of financial statements(a) Accounting treatment of trust beneficiary interests in real estate
As to trust beneficiary interests in real estate, all accounts of assets and liabilities within assets in trust, as
well as all income generated and expenses incurred from assets in trust, are recorded in the relevant balance
sheets and income statement accounts. Of such items, the following significant trust assets and liabilities
are shown separately on the balance sheet.
(i) Cash and bank deposits in trust(ii) Buildings in trust
Buildings and accompanying facilities in trust
Structures in trust
Tools, furniture and fixtures in trust
Land in trust
Construction in progress in trust(iii) Leasehold rights in trust(iv) Tenant leasehold and security deposits in trust(b) Accounting treatment of non-deductible consumption taxes
Non-deductible consumption taxes etc. regarding the acquisition of assets are capitalized as part ofacquisition cost of each asset.
(8)Notes on Material Accounting Estimates
Not applicable(9)

Notes to the Financial Statements(Notes to the Balance Sheet)*1. Minimum net assets as required by Article 67, Paragraph 4 of the Act on Investment Trusts and Investment
Corporations(Unit: JPY thousand)Fiscal period ended
Fiscal period ended
June 30, 2023
December 31, 2023
(as of June 30, 2023)(as of December 31, 2023)
50,00050,000*2. Allowance for temporary differences adjustment
Fiscal period ended June 30, 2023 (from January 1, 2023 to June 30, 2023)
1. Reasons, related assets and amounts(Unit: JPY thousand)Relatedassets, etc.

ReasonLeaseholdrights intrust

Amortizationof leasehold
rights in trust

Total

Balance atthebeginningof theperiodAllowance
set aside
duringperiod-131,332-6,130---6,130-131,332-6,130---6,130InitialamountReversalduringperiodBalance atthe end of
the period

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

31

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)

Fiscal period ended December 31, 2023 (from July 1, 2023 to December 31, 2023)
1. Reasons, related assets and amounts(Unit: JPY thousand)Relatedassets, etc.

ReasonLeaseholdrights intrust

Amortizationof leasehold
rights in trust

Total

Balance atthebeginningof theperiodAllowance
set aside
duringperiod-131,332-6,130---6,130-131,332-6,130---6,130InitialamountReversalduringperiodBalance atthe end of
the period

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

(Notes to Statement of Income and Retained Earnings)*1. Real estate rental revenues and expenses
Fiscal period ended
June 30, 2023
(from January 1, 2023 toJune 30, 2023)(Unit: JPY thousand)Fiscal period ended
December 31, 2023
(from July 1, 2023 to
December 31, 2023)

A. Real estate rental revenues
Rental revenue-real estate
Rent/common area charges (Note)

11,729,696

16,536,797

271,259

159,279

12,000,955

16,696,076

Maintenance costs

445,723438,212

Taxes and public dues

596,132

754,133

Non-life insurance premium

20,47523,534

3,311,017

3,776,448

114,992

104,388

Total

4,488,341

5,096,717

C.

7,512,613

11,599,359

4,615,327

7,441,452

Other revenues
Total

B.

Real estate rental expenses

Property related expenses

Depreciation expenses
Other expenses

Real estate rental income (A-B)(Note) Of which, revenue from variable hotel rents

32

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)*2. Management contract income
Fiscal period ended
June 30, 2023
(from January 1, 2023 toJune 30, 2023)(Unit: JPY thousand)Fiscal period ended
December 31, 2023
(from July 1, 2023 to
December 31, 2023)

A. Hotel operating revenue

8,388,052

6,309,635

B.

Hotel operating expenses

4,474,026

4,186,593

C.

Management contract revenue (A-B)

3,914,026

2,123,042

Non-life insurance premium

152,464

218,735

Depreciation expenses

435,496

441,542

Others61,36874,443

D. Management contract expenses

Total
E.

Management contract income (C-D)

649,329734,7223,264,696

1,388,320(Notes to Statement of Changes in Net Assets)
Number of issuable investment units authorized and number of investment units issued and outstanding
Fiscal period ended
June 30, 2023
(from January 1, 2023 toJune 30, 2023)
Number of issuable investment units
Number of investment units issued andoutstanding

Fiscal period ended
December 31, 2023
(from July 1, 2023 to
December 31, 2023)

10,000,000 units

10,000,000 units

6,096,840 units

6,737,121 units(Notes to Statement of Cash Flows)*1. Relationship between cash and cash equivalents in statement of cash flows and amounts in accompanying
balance sheet is as follows:
Fiscal period ended
June 30, 2023
(from January 1, 2023 toJune 30, 2023)
18,377,030(Unit: JPY thousand)Fiscal period ended
December 31, 2023
(from July 1, 2023 to
December 31, 2023)
21,956,120

Cash and bank deposits in trust
Time deposits with a deposit period of more than
three months

10,464,171

12,936,394-800,000-

Cash and cash equivalents

28,041,202

34,892,514

Cash and bank deposits

33

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)(Notes Related to Lease Transactions)Operating lease transactions (as lessee)
Unexpired lease fees
Fiscal period ended
June 30, 2023
(as of June 30, 2023)(Unit: JPY thousand)Fiscal period ended
December 31, 2023
(as of December 31, 2023)

Due within one year

320,951345,226

Due after one year

8,089,958

8,107,626

Total

8,410,909

8,452,852

Fiscal period ended
June 30, 2023
(as of June 30, 2023)
13,119,003(Unit: JPY thousand)Fiscal period ended
December 31, 2023
(as of December 31, 2023)
13,424,361

Due after one year

39,197,781

41,147,705

Total

52,316,785

54,572,066

Operating lease transactions (as lessor)
Unexpired lease fees

Due within one year

(Notes Related to Financial Instruments)
1.

Status of financial instruments(1) Policy for financial instruments
INV principally conducts its operations through investments in real estate and other specified assets to seek
to ensure stable income in the medium to long term.
The policy for raising funds is principally through issuing new investment units, investment corporation
bonds, etc. or borrowing loans.
Derivative transactions are to be entered into for the purpose of hedging against the risks of future interest
rate fluctuations, exchange rate fluctuations, etc. and not for speculation.
Surplus funds are managed after carefully taking into account safety, liquidity, the interest rateenvironment and financing.
(2) Nature and extent of risks arising from financial instruments and risk management
The funds raised through borrowings and issuing investment corporation bonds are mainly used to acquire
real estate properties or trust beneficiary interest in real estate (including related acquisition costs) and forthe refinancing of existing loans. Liquidity risks relating to loans are managed by the finance departmentof CIM by preparing and updating plans for funds, and monitoring the financial covenants set forth in loan
agreements.
(3) Supplemental information regarding fair value of financial instruments
Since certain assumptions, etc. are used in estimating the fair value of financial instruments, different
assumptions, etc. may result in the variance of such value.

34

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)

2.

Estimated fair value of financial instruments
Book value, fair value and the difference between values are as follows. “Cash and bank deposits”, “Cashand bank deposits in trust” and “Short-term loans payable” are omitted because their fair values are close
to their book values since they are settled in cash and in a short period of time. Moreover, “Tenantleasehold and security deposits in trust” is omitted because it is not material.

Fiscal period ended June 30, 2023 (as of June 30, 2023)(Unit: JPY thousand)Book Value

Fair Value

Difference

17,856,387

18,935,791

1,079,404

Total assets

17,856,387

18,935,791

1,079,404(2) Current portion of Investment Corporation
Bonds(2,000,000)(1,996,000)

4,000(3) Current portion of long-term loans payable(46,139,000)(46,139,000)-(4) Investment corporation bonds(11,400,000)(11,166,860)

233,140(5) Long-term loans payable(68,198,000)(68,198,000)-(127,737,000)(127,499,860)

237,140(486,218)(486,218)-(1) Investment securities

Total liabilities(6) Derivatives

Fiscal period ended December 31, 2023 (as of December 31, 2023)(Unit: JPY thousand)Book Value

Fair Value

Difference

17,856,387

21,102,242

3,245,855

Total assets

17,856,387

21,102,242

3,245,855(2) Current portion of Investment Corporation
Bonds(1,000,000)(994,700)

5,300(3) Current portion of long-term loans payable(36,787,000)(36,787,000)-(4) Investment corporation bonds(13,900,000)(13,650,170)

249,830(5) Long-term loans payable(180,893,000)(180,893,000)-(232,580,000)(232,324,870)

255,130(646,492)(646,492)-(1) Investment securities

Total liabilities(6) Derivatives(Note 1) Items recorded in the Liabilities Section are shown in parenthesis.
(Note 2) Receivables and payables arising from derivative transactions are recorded in net amounts, and if thetotal net amount is a negative amount, such amount is shown in parenthesis.

35

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)(Note 1) Methods to calculate fair values of financial instruments(1) Investment securities
For preferred equity interest, the assets and liabilities of the investee are valued at fair value, and theequity equivalent in the obtained net asset value is deemed as the fair value of the preferred equity
interest.
(2) Current portion of Investment Corporation Bonds (4) Investment corporation bonds
Fair value is calculated using a method based on market price.
(3) Current portion of long-term loans payable (5) Long-term loans payable
Long-term loan with floating interest rates reflecting changes in market rates within a short-term
period are stated at their book value as their book value approximate their fair value.
(6) Derivatives
Please refer to the “Notes Related to Derivative Transactions” below.

(Note 2) Repayment schedule of investment corporation bonds, long-term loans payable and other interestbearing debts after the closing date of the fiscal period
Fiscal period ended June 30, 2023 (as of June 30, 2023)(Unit: JPY thousand)Due after
Due within Due after one Due after two
Due after four Due after
three to four
one yearto two years to three years
to five years five years
years
Current portion of
investment corporation
bonds
Current portion of longterm loans payable
Investment corporationbonds
Long-term loans payable
Total

2,000,000

-

-

-

-

-

46,139,000

-

-

-

-

-

-

1,000,000

5,000,000-

2,200,000

3,200,000-

42,243,000

23,804,000-

1,190,000

961,000

48,139,000

43,243,000

28,804,000-

3,390,000

4,161,000

Fiscal period ended December 31, 2023 (as of December 31, 2023)(Unit: JPY thousand)Due after
Due within Due after one Due after two
Due after four Due after
three to four
one yearto two years to three years
to five years five years
years
Current portion of
investment corporation
bonds
Current portion of longterm loans payable
Investment corporationbonds
Long-term loans payable
Total

1,000,000

-

-

-

-

-

36,787,000

-

-

-

-

-

-

-

5,000,000-

5,700,000

3,200,000-

39,399,000

51,912,200

31,018,750

53,281,050

5,282,000

37,787,000

39,399,000

56,912,200

31,018,750

58,981,050

8,482,000

36

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)(Notes Related to Investment Securities)

Fiscal period ended June 30, 2023 (from January 1, 2023 to June 30, 2023)
Investment in subsidiaries and affiliates
Book Value
Investment in affiliates
Total(Unit: JPY thousand)Difference

Fair Value

17,856,387

18,935,791

1,079,404

17,856,387

18,935,791

1,079,404

Fiscal period ended December 31, 2023 (from July 1, 2023 to December 31, 2023)
Investment in subsidiaries and affiliates
Book Value
Investment in affiliates
Total(Unit: JPY thousand)Difference

Fair Value

17,856,387

21,102,242

3,245,855

17,856,387

21,102,242

3,245,855(Notes Related to Derivative Transactions)
1. Derivative transactions to which hedge accounting is not applied
Fiscal period ended June 30, 2023 (as of June 30, 2023)
About derivative transactions for which hedge accounting is not applied, the contract amount or theamount equivalent to the notional principal prescribed in the contracts as of the settlement of accounts are
as follows.
(Unit: JPY thousand)Classification

Derivativetransaction type, etc.

OTC transaction

Foreign Exchange
Forward, short
USD

Contract amount, etc.
Amount due
after one year
5,158,490

1,872,600

Fair value(Note 1)-490,769

Valuation
gains/losses-490,769(Note 1) Estimation method for fair value
Foreign Exchange Forward Estimated based on the price, etc. presented by the correspondent financial
institutions.
Fiscal period ended December 31, 2023 (as of December 31, 2023)
About derivative transactions for which hedge accounting is not applied, the contract amount or theamount equivalent to the notional principal prescribed in the contracts as of the settlement of accounts are
as follows.
(Unit: JPY thousand)Classification

Derivativetransaction type, etc.

OTC transaction

Foreign Exchange
Forward, short
USD

Contract amount, etc.
Amount due
after one year
4,397,800

989,200

Fair value(Note 1)-425,438

Valuation
gains/losses-425,438(Note 1) Estimation method for fair value
Foreign Exchange Forward Estimated based on the price, etc. presented by the correspondent financial
institutions.
2. Derivative transactions to which hedge accounting is applied
Fiscal period ended June 30, 2023 (as of June 30, 2023)
The contract amount or the amount equivalent to the notional principal prescribed in the contracts as of
the closing date under each hedge-accounting method are as shown below.
37

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)(Unit: JPY thousand)
Method of hedge
accounting

Derivativetransaction type,
etc.

Primary
hedged item

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

Fair value(Note 2)

Interest rate swap
Receive floating
Borrowings
4,550
36,687,000
18,441,000
rate/pay fixed
rate(Note 1) The contract amount, etc. for interest rate swap are stated based on a notional principal.
(Note 2) Estimation method for fair value
Interest rate swap
Estimated based on the price, etc. presented by the correspondent financial
institutions.
Principle
accounting
methodFiscal period ended December 31, 2023 (as of December 31, 2023)
The contract amount or the amount equivalent to the notional principal prescribed in the contracts as of
the closing date under each hedge-accounting method are as shown below.
(Unit: JPY thousand)
Method of hedge
accounting

Derivativetransaction type,
etc.

Primary
hedged item

Principle
accounting
methodInterest rate swap
Receive floating
rate/pay fixedrate

Borrowings

Contract amount, etc. (Note 1)
Amount due
after one year
130,282,250

101,297,250

Fair value(Note 2)

-221,054(Note 1) The contract amount, etc. for interest rate swap are stated based on a notional principal.
(Note 2) Estimation method for fair value
Interest rate swap
Estimated based on the price, etc. presented by the correspondent financial
institutions.
(Notes Related to Retirements Payments)
Not applicable(Notes Related to Asset Retirement Obligations)1.

Summary of the asset retirement obligations for the period
Part of INV’s assets has recorded asset retirement obligations in regard to its obligation to restore the land
to its original condition related to the fixed-term land lease agreement and contractual and legal obligation
to remove the asbestos.

2.

Calculation method for asset retirement obligations for the period
The amount of the asset retirement obligations has been calculated by estimating the period of use , basedon the remaining period until the expiration of the fixed-term land lease agreement (43 years), the usefullife of the buildings containing asbestos (15 to 31 years) and by using each discount rate of 1.342% and 0.963
to 1.505%.

3.

Increase/decrease in the total amount of asset retirement obligations

Balance at the beginning of the period
Increase due to the acquisition of property andequipment
Accretion expense
Balance at the end of the period
38

Fiscal period ended
June 30, 2023
(from January 1, 2023 toJune 30, 2023)
33,872(Unit: JPY thousand)Fiscal period ended
December 31, 2023
(from July 1, 2023 to
December 31, 2023)
34,097-357,149

225
34,097

1,955
393,202

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)(Notes Related to Revenue Recognition)
1. Breakdown of revenue from contracts with customers
Fiscal period ended June 30, 2023 (from January 1, 2023 to June 30, 2023)(Unit: JPY thousand)
Revenue from contracts
Net sales to externalwith customers (Note 1)
customers
Sale of real estate, etc.
27,645
15,914,981
Other
27,645
15,914,981
Total(Note 1) Revenue from the leasing business subject to the “Accounting Standard for Lease Transactions”(ASBJ Statement No. 13), dividend income subject to the “Accounting Standard for Financial
Instruments” (ASBJ Statement No. 10) and the sale of real estate, etc. subject to the “Practical
Guidelines on Accounting by Transferors for Securitization of Real Estate Using Special Purpose
Companies” (Accounting System Committee Report No. 15 of the Japanese Institute of Certified
Public Accountants) are not included in “Revenue from contracts with customers” as they are notcovered by the Accounting Standard for Revenue Recognition. Major revenue from contracts withcustomers is proceeds from sale of real estate properties.
Fiscal period ended December 31, 2023 (from July 1, 2023 to December 31, 2023)(Unit: JPY thousand)
Revenue from contracts
Net sales to externalwith customers (Note 1)
customers
Sale of real estate, etc.
28,37018,819,119
Other
28,37018,819,119
Total(Note 1) Revenue from the leasing business subject to the “Accounting Standard for Lease Transactions”(ASBJ Statement No. 13), dividend income subject to the “Accounting Standard for Financial
Instruments” (ASBJ Statement No. 10) and the sale of real estate, etc. subject to the “Practical
Guidelines on Accounting by Transferors for Securitization of Real Estate Using Special Purpose
Companies” (Accounting System Committee Report No. 15 of the Japanese Institute of Certified
Public Accountants) are not included in “Revenue from contracts with customers” as they are notcovered by the Accounting Standard for Revenue Recognition. Major revenue from contracts withcustomers is proceeds from sale of real estate properties.
2.

Information utilized as the basis for understanding revenue from contracts with customers
The information is as described in “Notes Concerning Significant Accounting Policies” above.

3.

Information on relationship of fulfillment of performance obligations based on contracts with customers withcashflow generated from said contracts as well as amount of revenue and period expected to be recognized in
the next calculation period or thereafter from contracts with customers existing at the end of the Reporting
Period(1) Balance of contract assets and contract liabilities, etc.
(Unit: JPY thousand)Fiscal period ended
Fiscal period ended
June 30, 2023
December 31, 2023
(from January 1, 2023 to(from July 1, 2023 toJune 30, 2023)
December 31, 2023)
Claims generated from contracts with customers
4,231
3,093
(balance at the beginning of the period)
Claims generated from contracts with customers
3,093
2,876
(balance at the end of the period)
Contract assets(balance at the beginning of the period)
Contract assets(balance at the end of the period)
Contract liabilities(balance at the beginning of the period)
Contract liabilities(balance at the end of the period)
39

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)(2) Transaction value allocated to remaining performance obligations
Not applicable(Notes Related to Segment and Related Information)
I. Segment Information
Disclosure is omitted because the real estate investment business is INV’s sole business and it has noreportable segments.
II. Related Information
Fiscal period ended June 30, 2023 (from January 1, 2023 to June 30, 2023)
1. Information about each product and service
Disclosure is omitted because net sales to external customers for a single product/service category
accounted for over 90% of the operating revenue on the statement of income.
2. Information about each geographic area
(1) Net sales(Unit: JPY thousand)Japan

The Cayman Islands
12,000,955

Total

3,914,026

15,914,981(Note) Net sales are based on the location of the customer and categorized by country or territory.
(2) Property and equipment
Disclosure is omitted because the amount of property and equipment located in Japan accounted forover 90% of the amount of property and equipment on the balance sheet.
3. Information about each major customer(Unit: JPY thousand)Name of customer

Operating revenues
8,022,489

MyStays Hotel Management Co., Ltd.

Related segment
Real Estate Investment

Fiscal period ended December 31, 2023 (from July 1, 2023 to December 31, 2023)
1. Information about each product and service
Disclosure is omitted because net sales to external customers for a single product/service category
accounted for over 90% of the operating revenue on the statement of income.
2. Information about each geographic area
(1) Net sales(Unit: JPY thousand)Japan

The Cayman Islands
16,696,076

Total

2,123,042

18,819,119(Note) Net sales are based on the location of the customer and categorized by country or territory.
(2) Property and equipment
Disclosure is omitted because the amount of property and equipment located in Japan accounted forover 90% of the amount of property and equipment on the balance sheet.
3. Information about each major customer(Unit: JPY thousand)Name of customer

Operating revenues
10,473,047

MyStays Hotel Management Co., Ltd.

40

Related segment
Real Estate Investment

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)(Notes Related to Rental Properties)
INV owns residential properties and hotels as core assets principally in the Tokyo area and major regional cities
with an aim to establish a portfolio focusing on both stability and growth potential. The book value changed
during the period, balance at the end of the period and the fair value are as follows.

Residences

Book value

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

Fair value at the end of the period

Commercial
facilities

Book value

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

Fair value at the end of the period

HotelsBook value

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

Fair value at the end of the period

Total

Book value

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

Fair value at the end of the period

Fiscal period ended
June 30, 2023
(from January 1, 2023 toJune 30, 2023)(Unit: JPY thousand)Fiscal period ended
December 31, 2023
(from July 1, 2023 to
December 31, 2023)

34,383,500

34,210,779-172,720-124,698

34,210,779

34,086,080

48,017,000

48,229,000

1,605,322

1,588,724-16,598

3,999

1,588,724

1,592,723

2,380,000

2,380,000

407,302,979

404,698,985-2,603,993

55,404,420

404,698,985

460,103,406

510,566,211

578,432,474

443,291,801

440,498,489-2,793,312

55,283,722

440,498,489

495,782,211

560,963,211

629,041,474(Note 1) Book value is the figure calculated by subtracting accumulated depreciation from acquisition price(including acquisition-related costs).
(Note 2) The major factors of increase in change during the previous fiscal period were construction work related
to capital expenditures, and the major factors of decrease were depreciation. The major factors ofincrease in change during the Reporting Period were acquisition of hotels and construction work related
to capital expenditures, and the major factor of decrease was depreciation.
(Note 3) The fair value as of the end of the period is determined based on the appraisal value or survey value
provided by Asset Research and Development Inc., Japan Real Estate Institute, JLL Morii Valuation &Advisory K.K., Tanizawa Sogo Appraisal Co., Ltd., Daiwa Real Estate Appraisal Co., Ltd. and CBRE,Inc.
For information related to profits and losses from rental properties, please refer to “Notes to Statement of Income
and Retained Earnings.”

41

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)(Notes Related to Tax Accounting)
1. Significant components of deferred tax assets and liabilities(Unit: JPY thousand)Fiscal period ended
December 31, 2023
(as of December 31, 2023)

Fiscal period ended
June 30, 2023
(as of June 30, 2023)(Deferred tax assets)
Enterprise tax payable
Buildings and other (merger)
Land (merger)

615

615

185,229

181,991

116,724

116,724

1,288,595

1,277,967

Asset retirement obligations

10,727

123,701

Amortization of fixed-term leasehold rights
Adjustment of acquisition prices (overseas
properties)
Deposits received

174,196

186,540

445,643441,696

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

2,221,732

2,339,028-1,288,595-1,277,967-933,137-1,061,060-2,221,732-2,339,028--

Loss carried forward (Note 1)

9,789

Subtotal (Note 2)
Total(Note 1) The amounts of tax loss carried forward and the deferred tax assets by carry-forward period are as
follows.
Fiscal period ended June 30, 2023 (as of June 30, 2023)(Unit: JPY thousand)Due within
one yearTax loss carriedforward (a)Due after
Due after
Due after
Due after
one to two two to three three to four four to five
years
years
years
years

Due after
five years

Total

-

-

-

-

-

1,288,595 1,288,595

Valuation allowance

-

-

-

-

-

-1,288,595 -1,288,595

Deferred tax assets

-

-

-

-

-

-

-

(a) Tax loss carried forward is multiplied by statutory tax rate.
Fiscal period ended December 31, 2023 (as of December 31, 2023)(Unit: JPY thousand)Due within
one year

Due after
Due after
Due after
Due after
one to two two to three three to four four to five
years
years
years
years

Due after
five years

Total

Tax loss carriedforward (a)

-

-

-

-

-

1,277,967 1,277,967

Valuation allowance

-

-

-

-

-

-1,277,967 -1,277,967

Deferred tax assets

-

-

-

-

-

-

-

(a) Tax loss carried forward is multiplied by statutory tax rate.
(Note 2) Valuation allowance increased by JPY 117,295 thousand mainly due to an increase in the valuation
allowance for asset retirement obligations.

42Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)

2. Significant difference between statutory tax rate and the effective tax rate

Statutory tax rate

Fiscal period ended
June 30, 2023
(as of June 30, 2023)
31.46(Unit: %)Fiscal period ended
December 31, 2023
(as of December 31, 2023)
31.46

Deductible cash distributions-31.50-31.50Changes in valuation allowance

-3.52

1.06

Expiration of loss carried forward

3.55

-

Others

0.01

-1.01

Effective tax rate

0.01

0.01

(Notes Related to Equity-Method Income)Fiscal period ended June 30, 2023 (from January 1, 2023 to June 30, 2023)
Amount of investment in affiliates
Amount of investment when accounted for by the equity method
Amount of investment profit when accounted for by the equity method

JPY 17,856,387 thousand
JPY 17,341,860 thousand
JPY -18,280 thousand

Fiscal period ended December 31, 2023 (from July 1, 2023 to December 31, 2023)
Amount of investment in affiliates
Amount of investment when accounted for by the equity method
Amount of investment profit when accounted for by the equity method43

JPY 17,856,387 thousand
JPY 18,231,267 thousand
JPY 889,407 thousandFinancial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)(Notes Related to Transactions with Related Parties)
1. Transactions with Parent Company and Major Corporate Unitholders
Fiscal period ended June 30, 2022 (from January 1, 2022 to June 30, 2022)
Balance atClassification

Interested
party of CIM

Name

Address

Statedcapital Business or(JPYoccupation
million)

Percentage
Transaction
Relationshipthe end ofof votingamountType ofthe periodrights(JPY
Account
Common Business transaction
(JPY
owned
thousand)board
relationthousand)(%)(Note 1)
membership(Note 1)Naqua Hotel &Resorts
Minato-ku,
Management
Tokyo
Co., Ltd.
(Note 2)10

Hotelbusiness--

Lessee andoperator of
hotelsRentalrevenues

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

100

Hotel
business--

Lessee andoperator of
hotelsRentalrevenues

Accounts
612,959 receivable

261,128

Accounts
8,022,489 receivable 3,227,566(Note 1) Consumption taxes, etc., are not included in transaction amounts, but are included in the balance at the end of the period.
(Note 2) Naqua Hotel & Resorts Management Co., Ltd. and MyStays Hotel Management Co., Ltd. have no capital relationship to bedisclosed with CIM. However, these tenants and operators have received an anonymous partnership investment orinvestment through funds that are managed by affiliates of FIG (a subsidiary of SoftBank Group Corp., which is a parent
company of CIM indirectly owning 100% of its issued shares). Accordingly, INV treats Naqua Hotel & Resorts Management
Co., Ltd. and MyStays Hotel Management Co., Ltd. as the equivalent to interested parties.

Fiscal period ended December 31, 2023 (from July 1, 2023 to December 31, 2023)
Balance atClassification

Name

Address

Statedcapital Business or(JPYoccupation
million)

Percentage
Transaction
Relationshipthe end ofof votingamountType ofthe periodrights(JPY
Account
Common Business transaction
(JPY
owned
thousand)board
relationthousand)
(%)
(Note
1)
membership(Note 1)

Purchase of
Sheffield Asset
Tokutei
Minato-ku,
MokutekiTokyo
Kaisha(Note 3)

Investment

0.0 management--business

Seller of
trust
trust
beneficiary
beneficiary interests ininterests in real estate
real estate(Note 2)40,293,000--

9,840,000--

4,652,000--

2,445,000--(Note 4)Purchase of
Heijo Tokutei
Mokuteki
Kaisha(Note 3)

Minato-ku,
Tokyo

Investment

0.1 management--business

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

(Note 4)Purchase of
Nippori Tokutei
Mokuteki
Minato-ku,
KaishaTokyo(Note 3)

Investment

0.1 management--business

Interested
party of CIM

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

(Note 4)Purchase of
Shiretoko
Tokutei
Mokuteki
Kaisha(Note 3)

Minato-ku,
Tokyo

Investment

0.1 management--business

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

(Note 4)
Naqua Hotel &Resorts
Minato-ku,
Management
Tokyo
Co., Ltd.
(Note 3)10

Hotelbusiness--

Lessee andoperator of
hotelsRentalrevenues

1,064,067

Accounts
receivable

MyStays HotelManagement Minato-ku,
Co., Ltd.
Tokyo(Note 3)

100

Hotel
business--

Lessee andoperator of
hotelsRentalrevenues

10,473,047

Accounts
3,915,256
receivable

174,796(Note 1) Consumption taxes, etc., are not included in transaction amounts, but are included in the balance at the end of the period.

44

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)(Note 2) The terms and conditions have been determined based on the Asset Manager’s internal rules and manual regardingtransactions with sponsor related parties.
(Note 3) Sheffield Asset Tokutei Mokuteki Kaisha , Heijo Tokutei Mokuteki Kaisha, Nippori Tokutei Mokuteki Kaisha, Shiretoko
Tokutei Mokuteki Kaisha, Naqua Hotel & Resorts Management Co., Ltd. and MyStays Hotel Management Co., Ltd. have nocapital relationship to be disclosed with CIM. However, these tenants and operators have received an anonymous
partnership investment or investment through funds that are managed by affiliates of FIG (a subsidiary of SoftBank Group
Corp., which is a parent company of CIM directly/indirectly owning 100% of its issued shares). Accordingly, INV treats
Sheffield Asset Tokutei Mokuteki Kaisha , Heijo Tokutei Mokuteki Kaisha, Nippori Tokutei Mokuteki Kaisha, Shiretoko
Tokutei Mokuteki Kaisha, Naqua Hotel & Resorts Management Co., Ltd. and MyStays Hotel Management Co., Ltd. as theequivalent to interested parties.
(Note 4) The purchase of trust beneficiary interests pertains to the following properties. The transaction amount is the purchase pricestated in the trust beneficiary purchase agreement, to which other expenses for acquisition, property taxes, city planning taxes
and consumption taxes are not included.

Property
NumberName of Property

Counterparty

D84

Fusaki Beach Resort Hotel & Villas

Sheffield Asset Tokutei Mokuteki Kaisha

40,293,000

D85

Tateshina Grand Hotel Takinoyu

Heijo Tokutei Mokuteki Kaisha

8,365,000

D86

Hotel MyStays Okayama

Nippori Tokutei Mokuteki Kaisha

2,613,000

D87

Hotel MyStays Aomori Station

Shiretoko Tokutei Mokuteki Kaisha

2,445,000

D88

Hotel MyStays Soga

Nippori Tokutei Mokuteki
Kaisha2,039,000

D89

Tazawako Lake Resort & Onsen

Heijo Tokutei Mokuteki Kaisha

1,475,000

Total

2.

Purchase Price(JPY thousand)

57,230,000

Transactions with Affiliates
None for both the fiscal period ended June 30, 2023 and the fiscal period ended December 31, 2023.

3.

Transactions with Companies under Common Control
None for both the fiscal period ended June 30, 2023 and the fiscal period ended December 31, 2023.

45

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)

4.

Transactions with Directors and Major Individual Unitholders
Fiscal period ended June 30, 2023 (from January 1, 2023 to June 30, 2023)

Details of transaction

Transaction
amount(JPY
thousand)(Note 3)

Account

Balance atthe end of
the period(JPY
thousand)(Note 3)

Classification

Name

Business or occupation

Ratio ofvotingrights(%)

Directors andclose relatives

Naoki
FukudaExecutive Director of
INV and President &CEO of CIM-

Payment of asset
management fees to
CIM (Note 1)

300,000

Accruedexpenses

165,000-

Payment ofadministrative
agency fees fororganizational
management to CIM(Note 2)600

Accruedexpenses

330

Same asabove(Note 1)
(Note 2)
(Note 3)Same asabove

Same as above

Naoki Fukuda served as a representative of the third party (CIM), and the fee is as set forth in the Articles ofIncorporation of INV.
Naoki Fukuda served as a representative of the third party (CIM), and the fee is as set forth in “Administrative
Agency Agreement for Organizational Management,” entered into by and between INV and CIM.
Consumption taxes, etc. are not included in the transaction amounts, but are included in the balance at the end of
the period.

Fiscal period ended December 31, 2023 (from July 1, 2023 to December 31, 2023)

Details of transaction

Transaction
amount(JPY
thousand)(Note 3)

Account

Balance atthe end of
the period(JPY
thousand)(Note 3)

Classification

Name

Business or occupation

Ratio ofvotingrights(%)

Directors
and close
relatives

Naoki
FukudaExecutive Director of
INV and President &CEO of CIM-

Payment of asset
management fees to
CIM (Note 1)

305,723

Accruedexpenses

165,000-

Payment ofadministrative
agency fees fororganizational
management to CIM(Note 2)

1,100

Accruedexpenses

880

Same asabove(Note 1)
(Note 2)
(Note 3)Same asabove

Same as above

Naoki Fukuda served as a representative of the third party (CIM), and the fee is as set forth in the Articles ofIncorporation of INV.
Naoki Fukuda served as a representative of the third party (CIM), and the fee is as set forth in “Administrative
Agency Agreement for Organizational Management,” entered into by and between INV and CIM.
Consumption taxes, etc. are not included in the transaction amounts, but are included in the balance at the end of
the period.

46

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)(Notes Related to Parent Company or Any Material Affiliated Company)
1. Information of parent company
Not applicable
2. Summarized financial information of material affiliated company
Kingdom Special Purpose Company was the material affiliated company during the Reporting Period, andthe summary of financial statements are as below:(Unit: JPY thousand)
Kingdom Special Purpose Company

Total specified assets
Total other assets

From October 1, 2022 From April 1, 2023
to March 31, 2023 to September 30, 2023
99,527,689
99,346,106
1,974,338
4,083,121

Total current liabilities
Total non-current liabilities

161,81765,970,166

273,900
65,970,166

Total net assets

35,370,044

37,185,160

652,802-36,702-37,3072,518,282
1,815,721
1,815,116

Operating revenue
Income before income taxes
Net income(Notes Related to Per Unit Information)

Fiscal period ended
June 30, 2023
(from January 1, 2023 toJune 30, 2023)

Fiscal period ended
December 31, 2023
(from July 1, 2023 to
December 31, 2023)

Net assets per unit

JPY 41,665

JPY 43,090

Net income per unit

JPY 1,462

JPY 1,639

Net income per unit is calculated by dividing net income for the period by the average number of investment
units during the period. Diluted net income per unit is not stated as there are no diluted units.
(Note 1)The basis for calculating net income per unit is as follows.

Fiscal period ended
June 30, 2023
(from January 1, 2023 toJune 30, 2023)
Net income (JPY thousand)Amounts not attributable to common unitholders(JPY thousand)Net income attributable to common units(JPY thousand)Average number of investment units during theperiod (units)(Notes Related to Significant Subsequent Events)
Not applicable

47

Fiscal period ended
December 31, 2023
(from July 1, 2023 to
December 31, 2023)

8,913,742

11,032,571--

8,913,742

11,032,571

6,096,840

6,732,039

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)(10) Changes in Total Number of Investment Units Issued and Outstanding
Changes in the number of investment units issued and outstanding and unitholders’ capital for the past
five years up to the end of the Reporting Period are as follows.

Date

Type of Issue

Total Number of
Investment Units Issued andOutstanding (units)
Increase

July 18, 2019
August 15, 2019

August 22, 2019

Public offering
Third-party
allotment
Reversal of
allowance fortemporarydifferences
adjustment

Total

Unitholders’ Capital (JPY)
Increase

Total

Reference

409,524

6,076,364

23,317,887,036

234,410,427,350(Note 1)

20,476

6,096,840

1,165,882,964

235,576,310,314(Note 2)-

6,096,840

125,201,855

235,701,512,169(Note 3)

July 31, 2023

Public offering

609,792

6,706,632

32,761,684,992

268,463,197,161(Note 4)

August 28, 2023

Third-party
allotment

30,4896,737,121

1,638,052,014

270,101,249,175(Note 5)(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)New investment units were issued in a public offering at a price of JPY 58,898 per unit (JPY 56,939 after deducting
the underwriters’ discount) to raise a part of the funds for the acquisition of new properties.
New investment units were issued in a third-party allotment at a price of JPY 56,939 per unit for the purpose ofraising a part of the funds for the acquisition of specified assets.
Reversal of allowance for temporary differences adjustment was decided at the meeting of the Board of Directors of
INV held on August 22, 2019 and the amount was incorporated into unitholders’ capital.
New investment units were issued in a public offering at a price of JPY 55,566 per unit (JPY 53,726 after deducting
the underwriters’ discount) to raise a part of the funds for the acquisition of new properties.
New investment units were issued in a third-party allotment at a price of JPY 53,726 per unit for the purpose ofraising a part of the funds for the acquisition of specified assets.

48

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)

3. Reference Information(1)

Type ofasset

Composition of INV’s Assets

Geographic
area

PurposeFiscal period ended June 30, 2023
(as of June 30, 2023)
Percentage of
total assets(%)

Amount held
(JPY million)

2

0.0

2

0.0

-

-

-

-

Overseas (Note 4)

33,168

6.7

32,814

5.8

Subtotal

33,1706.7

32,817

5.8

33,1706.7

32,817

5.8

28,383

5.7

28,301

5.0

5,827

1.2

5,784

1.0

34,2106.9

34,086

6.1

-

-

-

-

1,588

0.3

1,592

0.3

1,588

0.3

1,592

0.3

166,28533.5

167,67429.8

205,24341.3

259,61246.1

371,52874.8

427,28675.8(Note 1)

Amount held
(JPY million)(Note 2)Real
estateHotelsGreater Tokyo
area (Note 3)
Major regional
CitiesTotal real estate

Residences

Greater Tokyo
area
Major regional
citiesSubtotal

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

HotelsFiscal period ended December 31, 2023
(as of December 31, 2023)

Greater Tokyo
area
Major regional
citiesSubtotal(Note 2)

Percentage of
total assets(%)

Total real estate in trust

407,32782.0

462,965

82.2

Preferred equity interest (Note 5)

17,856

3.6

17,856

3.2

Deposits and other assets

38,465

7.7

49,7548.8

496,819100.0

563,393100.0(440,498)(88.7)(495,782)(88.0)

Total assets (Note 6)(Note 1)“Greater Tokyo area” refers to Tokyo, Kanagawa, Chiba and Saitama.

(Note 2) “Amount held” is from the balance sheet as of the end of the Reporting Period (book value after depreciation for real estate,leasehold and real estate in trust). The amounts held for hotels are calculated by including book value of accompanying FF&E,
in principle.
(Note 3)(Note 4)(Note 5)(Note 6)

While Hotel MyStays Haneda is held as trust beneficiary interests, part of accompanying FF&E is held in kind, which falls under
this category.
The Leasehold of the Cayman Hotels falls under the category of “Real estate” for “Overseas.” The leasehold interests are therights equivalent to long-term real estate leasehold rights for buildings and land under the laws of the Cayman Islands (Term:
99 years; annual lease payment: USD 1 or KYD 1). INV implemented an investment structure change regarding “Westin Grand
Cayman Seven Mile Beach Resort & Spa” and “Sunshine Suites Resort” on May 9, 2019 (Cayman Islands local time), a change
from making investments based on the TK agreement to directly owning the Leasehold of the Cayman Hotels, which were theunderlying assets of the TK.
Preferred equity interest issued by Kingdom Special Purpose Company, with the Sheraton Grande Tokyo Bay Hotel as anunderlying asset (asset in trust of trust beneficiary interest acquired by Kingdom Special Purpose Company, which is the realestate that serves as the main source of revenue for Kingdom Special Purpose Company).
The figures indicated in parenthesis under “Total assets” show the amounts related to owned real estate (excluding the amountof preferred equity interest).

49

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)

Fiscal period ended June 30, 2023
(as of June 30, 2023)
Percentage ofAmount (JPY million)
total assets (%)

Fiscal period ended December 31, 2023
(as of December 31, 2023)
Percentage ofAmount (JPY million)
total assets (%)

Total Liabilities

242,795

48.9

273,088

48.5

Total Net Assets

254,02451.1

290,305

51.5

Total Liabilities
and Net Assets

496,819100.0

563,393

100.0

(2)

Real Estate Properties, Etc.
The following summarizes the real estate assets (real estate or trust beneficiary interest comprised mainlyof real estate) as well as preferred equity interest held by INV as of the end of the Reporting Period.

aPrice and investment percentage

Appraisal
Balancevalue at theAcquisition
sheet
Investment
Propertyend of the
Location
Legal form
price
carrying percentage
Appraiser
numberName of property
period(Note 2)of asset (JPY million) value(%)(Note 7)(Note 1)(JPY
(Note 3)(JPY
(Note 4)
million)million)(Note 5)
Trust
Nisshin Palacestage
beneficiaryA26
1-31-2 Izumi, Suginami-ku, Tokyo
1,251
1,082
0.2
1,320
A
Daitabashi
interests(Note 8)Trust
2-26-6 Nishi-Gotanda,
A28 Growth Maison Gotanda
beneficiary
888
810
0.2
1,150
A
Shinagawa-ku, Tokyo
interests
Trust
Growth Maison
A29
6-58-16 Kameido, Koto-ku, Tokyo beneficiary
1,070
921
0.2
1,310
A
Kameidointerests
Trust
3-27-18 Itabashi, Itabashi-ku,
A30 Emerald House
beneficiary
1,505
1,299
0.3
1,510
A
Tokyo
interests
Trust
3-15-35 Takanodai, Nerima-ku,
beneficiary
A32 Suncrest Shakujii-Koen
1,088
1,045
0.2
1,290
A
Tokyo
interests(Note 8)Trust
Growth Maison Shin3-16-2 Shin-Yokohama, Kohoku- beneficiary
A33
1,059
919
0.2
1,330
A
Yokohama
ku, Yokohama-shi, Kanagawa
interests(Note 8)
Trust
Belle Face Ueno1-27-10 Higashi-Ueno, Taito-ku,
beneficiary
A34
1,023
893
0.2
1,190
A
Okachimachi
Tokyointerests(Note 8)Trust
beneficiary
A35 Grand Rire Kameido
3-39-12 Kameido, Koto-ku, Tokyo
906
757
0.2
1,120
A
interests(Note 8)Trust
1-15-15 Okamoto, Setagaya-ku,
beneficiary
A37 Growth Maison Yoga
795
707
0.1
869
A
Tokyo
interests(Note 8)Trust
3-7-6 Nishikicho, Tachikawa-shi,
A38 Route Tachikawa
beneficiary
676
692
0.1
733
A
Tokyo
interests
Trust
Shibuya-Honmachi
2-35-2 Honmachi, Shibuya-ku,
beneficiary
A39
651
713
0.1
743
A
MansionTokyo
interests(Note 8)Trust
4-13-15 Kinuta, Setagaya-ku,
A40 City Heights Kinuta
beneficiary
646
657
0.1
639
A
Tokyo
interests

50

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)
Appraisal
Balancevalue at theAcquisition
sheet
Investment
Propertyend of the
Location
Legal form
price
carrying percentage
Appraiser
numberName of property
period(Note 2)of asset (JPY million) value(%)(Note 7)(Note 1)(JPY
(Note 3)(JPY
(Note 4)
million)million)(Note 5)Trust
2-5-13 Namiki, Kawaguchi-shi,
Acseeds Tower
beneficiary
A41
620
485
0.1
832
A
Saitama
Kawaguchi-Namiki
interests(Note 8)Trust
3-4-4 Nakamachi, Machida-shi,
beneficiary
A43 College Square Machida
589
549
0.1
537
A
Tokyo
interests(Note 8)Trust
beneficiary
A44 Belair Meguro
1-2-15 Meguro, Meguro-ku, Tokyo
589
544
0.1
667
A
interests(Note 8)Trust
2-7-47 Tarumachi, Kohoku-ku,
beneficiary
A45 Wacore Tsunashima I
572
553
0.1
575
A
Yokohama-shi, Kanagawa
interests(Note 8)Trust
1-6-6 Kouyama, Nerima-ku,
beneficiary
A46 Foros Nakamurabashi
566
488
0.1
652
A
Tokyo
interests(Note 8)Trust
5-29-51 Kaijin, Funabashi-shi,
beneficiary
A47 Growth Maison Kaijin
557
512
0.1
580
A
Chiba
interests(Note 8)Trust
7-3-1 Arakawa, Arakawa-ku,
beneficiary
A48 College Square Machiya
510
443
0.1
630
A
Tokyo
interests(Note 8)
Trust
Towa City Coop
5-49-7 Higashi-Ikebukuro,
beneficiary
A59
866
779
0.2
1,390
B
Shinotsuka II
Toshima-ku, Tokyo
interests
Trust
1-22-7 Sekimachi-Kita, Nerima-ku,
beneficiary
A61 Bichsel Musashiseki
577
577
0.1
865
C
Tokyo
interests
Trust
Towa City Coop
4-338-2 Sengencho, Nishi-ku,
beneficiary
A63
1,110
995
0.2
1,560
B
Sengencho
Yokohama-shi, Kanagawa
interests
Trust
2-11-10 Omachi, Aoba-ku,
beneficiary
A64 Royal Park Omachi
415
374
0.1
715
B
Sendai-shi, Miyagi
interests
Trust
Lexington Square
1-15-18 Haginomachi,
beneficiary
A65
330
252
0.1
464
B
Haginomachi
Miyagino-ku, Sendai-shi, Miyagi
interests
Trust
2-44 Otanacho, Chikusa-ku,
beneficiary
A66 Visconti Kakuozan
255
225
0.0
305
D
Nagoya-shi, Aichi
interests
Trust
Lexington Square Honjo 4-20-6 Higashikomagata,beneficiary
A72
511
399
0.1
786
D
Azumabashi
Sumida-ku, Tokyo
interests
Trust
AMS TOWER Minami
2-5-15 Minami 6-Jo Nishi,
beneficiary
A73
1,180
854
0.2
1,310
D
6-Jo
Chuo-ku, Sapporo-shi, Hokkaido
interests
Trust
2-13-17 Heian, Kita-ku,
beneficiary
A84 Revest Heian
595
477
0.1
878
B
Nagoya-shi, Aichi
interests
Trust128-1 Yamabukicho Shinjuku-ku,
beneficiary
A87 Excellente Kagurazaka
543
482
0.1
878
B
Tokyo, and one other parcel
interests
Trust
A90 Queen's Court Fukuzumi 1-3-10 Fukuzumi, Koto-ku, Tokyo beneficiary
456
400
0.1
820
B
interests

51

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)
Appraisal
Balancevalue at theAcquisition
sheet
Investment
Propertyend of the
Location
Legal form
price
carrying percentage
Appraiser
numberName of property
period(Note 2)of asset (JPY million) value(%)(Note 7)(Note 1)(JPY
(Note 3)(JPY
(Note 4)
million)million)(Note 5)Trust
5-14-17 Higashi-Oi, Shinagawabeneficiary
A92 Belair Oimachi
412
376
0.1
681
B
ku, Tokyo
interests
Trust
3-18-29 MinamiA93 Siete Minami-Tsukaguchi Tsukaguchimachi, Amagasaki-shi, beneficiary
374
324
0.1
581
B
interests
Hyogo
Trust
Prime Life Sannomiya
4-3-23 Isogamidori, Chuo-ku,
beneficiary
A94
373
320
0.1
579
B
Isogami Koen
Kobe-shi, Hyogo
interests
Trust
Century Park Shinkawa 4-1-2 Shinkawacho, Minato-ku,
beneficiary
A96
335
284
0.1
551
B
1-bankan
Nagoya-shi, Aichi
interests
Trust
A97 West Avenue
1-5-17 Nishi, Kunitachi-shi, Tokyo beneficiary
331
302
0.1
430
B
interests
Trust
2-25-11 Mikage Tsukamachi,
beneficiary
A99 Prime Life Mikage
297
253
0.1
439
B
Higashinada-ku, Kobe-shi, Hyogo
interests
Trust
5-45-10 Mukojima, Sumida-ku,
beneficiary
A101 Lieto Court Mukojima
1,683
1,569
0.3
2,310
B
Tokyo
interests
Trustbeneficiary
A102 Lieto Court Nishi-Ojima 2-41-14 Ojima, Koto-ku, Tokyo
1,634
1,514
0.3
2,240
B
interests
Trust
5-38 Fudegasakicho, Tennouji-ku,
beneficiary
A103 Royal Parks Momozaka
2,910
2,417
0.5
3,290
C
Osaka-shi, Osakainterests
Trust
3-35-20 Shinden, Adachi-ku,
beneficiary
A104 Royal Parks Shinden
5,024
4,432
0.9
6,200
C
Tokyo
interests
Trust
Royal Parks Seasir
3-41-7 Minami-Senju, Arakawabeneficiary
A106
2,683
2,392
0.5
3,280
B
Minami-Senju
ku, Tokyo
interests
Subtotal (41 properties)

B18

AEON TOWN Sukagawa

105 Furukawa, Sukagawa-shi,
Fukushima

Trust
beneficiaryinterests

Subtotal (1 property)

D01

D02

D03

D04

D05

D06

D07

Trust
beneficiaryinterests
Trust
Hotel MyStays Asakusa 1-21-11 Honjo, Sumida-ku, Tokyo beneficiaryinterests
Trust
52, Kasabokocho, Higashiiru,
Hotel MyStays Kyotobeneficiary
Aburanokoji, Shijyodori,Shijointerests
Shimogyo-ku, Kyoto-shi, Kyoto
Trust
MyStays Shin-Urayasu
2-1-4 Akemi, Urayasu-shi, Chiba beneficiary
Conference Centerinterests
Trust
3-5-1 Tekkodori, Urayasu-shi,
Hotel MyStays Maihama
beneficiary
Chibainterests
Trust
Hotel MyStays Premier 2-4-1 Sonezakishinchi, Kita-ku,
beneficiary
DojimaOsaka-shi, Osakainterests
Trust
Hotel MyStays Nagoya- 2-23-22 Higashi-Sakura, Naka-ku,
beneficiary
Sakae
Nagoya-shi, Aichi
interests
Hotel MyStays Kanda

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

52

38,46534,086

7.0

48,229

-

2,320

1,592

0.4

2,380

C

2,320

1,592

0.4

2,380

-

2,851

2,758

0.5

5,060

B

2,584

2,436

0.5

4,480

B

6,024

5,387

1.1

8,300

B

4,930

4,310

0.9

7,610

B

4,870

4,433

0.9

7,540

B

3,845

3,609

0.7

6,610

B

2,958

2,473

0.5

5,620

B

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)
Appraisal
Balancevalue at theAcquisition
sheet
Investment
Propertyend of the
Location
Legal form
price
carrying percentage
Appraiser
numberName of property
period(Note 2)of asset (JPY million) value(%)(Note 7)(Note 1)(JPY
(Note 3)(JPY
(Note 4)
million)million)(Note 5)
Trust
Hotel MyStays
1-4-8 Awaji-machi, Chuo-ku,
beneficiary
D08
2,514
2,200
0.5
3,340
B
Sakaisuji-Honmachi
Osaka-shi, Osakainterests
Trust
Hotel MyStays
4-81 Sueyoshicho, Naka-ku,
beneficiary
D09
2,119
2,060
0.4
4,190
B
Yokohama
Yokohama-shi, Kanagawa
interests
Trust
5-43-7 Higashi-Nippori,beneficiary
D10 Hotel MyStays Nippori
1,898
1,719
0.3
2,570
B
Arakawa-ku, Tokyo
interests
Trust
Hotel MyStays
3-14-20 Haruyoshi, Chuo-ku,
beneficiary
D11
1,570
1,367
0.3
5,820
B
Fukuoka-Tenjin-Minami Fukuoka-shi, Fukuoka
interests
Trust
3-26 Shin-Ogawamachi,
beneficiaryD12 Flexstay Inn Iidabashi
1,381
1,299
0.3
2,110
B
Shinjuku-ku, Tokyo
interests
Trust
Hotel MyStays Ueno
D13
1-5-7 Matsugaya, Taito-ku, Tokyo beneficiary
1,331
1,159
0.2
2,050
B
Inarichointerests
Trust
1-22-19 Kita-Shinagawa,beneficiaryD14 Flexstay Inn Shinagawa
1,242
1,159
0.2
2,060
B
Shinagawa-ku, Tokyo
interests
Trust
1-52-5 Tokiwadai, Itabashi-ku,
beneficiary
D15 Flexstay Inn Tokiwadai
1,242
1,171
0.2
2,190
B
Tokyo
interests
Trust
3-6-16 Sugamo, Toshima-ku,
beneficiaryD16 Flexstay Inn Sugamo
1,192
1,060
0.2
2,220
B
Tokyo
interests
Trust
1-3-2 Tokuicho, Chuo-ku,
beneficiary
D17 Hotel MyStays Otemae
1,192
1,093
0.2
2,570
B
Osaka-shi, Osakainterests
Trust
Hotel MyStays Kiyosumi
beneficiary
D18
1-12-16 Tokiwa, Koto-ku, Tokyo
749
819
0.1
1,540
B
Shirakawainterests
Trust
Flexstay Inn Nakanobu 4-27-12 Futaba, Shinagawa-ku,
beneficiary
D19
589
543
0.1
844
B
P1
Tokyo
interests
Trust
Flexstay Inn Nakanobu 4-27-8 Futaba, Shinagawa-ku,
beneficiary
D20
283
275
0.1
406
B
P2
Tokyo
interests
Trust
APA Hotel Yokohama- 3-37-2 Sumiyoshicho, Naka-ku,
beneficiary
D21
8,350
7,107
1.5
10,000B
Kannai
Yokohama-shi, Kanagawa
interests
Trust
Hotel MyStays
26-17 Honcho, Hakodate-shi,
beneficiary
D22
2,792
2,612
0.5
4,000
B
Hakodate-Goryokaku
Hokkaido
interests
Trust
5-10-15 Shirokane, Minato-ku,
beneficiary
D23 Flexstay Inn Shirogane
2,119
2,046
0.4
2,430
B
Tokyo
interests
Trustbeneficiary
D24 Hotel MyStays Haneda 5-1-13 Haneda, Ota-ku, Tokyo
7,801
6,853
1.4
8,470
B
interests
Trust
Hotel MyStays Kameido
D25
6-32-1 Kameido, Koto-ku, Tokyo beneficiary
5,594
5,171
1.0
7,730
B
P1
interests
Trust
Hotel MyStays Ueno
5-5-13 Higashi-Ueno, Taito-ku,
beneficiary
D26
3,821
3,538
0.7
3,980
B
IriyaguchiTokyo
interests
Trust
Hotel MyStays Kameido
beneficiaryD27
6-7-8 Kameido, Koto-ku, Tokyo
3,742
3,412
0.7
5,180
B
P2
interests
Trust
1-23 Masagocho, Shimizu-ku,
beneficiary
D28 Hotel MyStays Shimizu
2,198
1,959
0.4
2,510
B
Shizuoka-shi, Shizuoka
interests

53

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)
Appraisal
Balancevalue at theAcquisition
sheet
Investment
Propertyend of the
Location
Legal form
price
carrying percentage
Appraiser
numberName of property
period(Note 2)of asset (JPY million) value(%)(Note 7)(Note 1)(JPY
(Note 3)(JPY
(Note 4)
million)million)(Note 5)
Trust
Super Hotel Shinbashi/ 5-16-4 Shinbashi, Minato-ku,
beneficiary
D29
1,624
1,552
0.3
1,880
B
KarasumoriguchiTokyo
interests
Trustbeneficiary
D30 Flexstay Inn Higashi-Jujo 2-10-2 Nakajujo, Kita-ku, Tokyo
1,277
1,245
0.2
1,390
B
interests
Trust
Hotel MyStays
2-4-1 Higashi-Shukugo,
beneficiary
D31
1,237
1,180
0.2
2,100
B
Utsunomiya
Utsunomiya-shi, Tochigi
interests
Trust
Flexstay Inn Kawasaki- 1-13-2 Kaizuka, Kawasaki-ku,
beneficiary
D32
980
849
0.2
1,160
B
Kaizuka
Kawasaki-shi, Kanagawa
interests
Trust
1-3-2 Takara-machi, Toyama-shi,
beneficiary
D33 Comfort Hotel Toyama
979
856
0.2
1,180
B
Toyamainterests
Trust
Flexstay Inn Kawasaki- 15-9 Ogawacho, Kawasaki-ku,
beneficiary
D34
906
843
0.2
913
B
Ogawacho
Kawasaki-shi, Kanagawa
interests
Trust
D35 Flexstay Inn Ekoda
8-6 Sakaecho, Nerima-ku, Tokyo beneficiary
5,069
4,679
0.9
4,690
B
interests
Trust
Super Hotel Tokyo-JR
2-21-9 Akebonocho, Tachikawabeneficiary
D36
1,170
1,038
0.2
1,240
E
Tachikawa Kitaguchi
shi, Tokyo
interests
Trust
Super Hotel JR UenobeneficiaryD37
7-9-14 Ueno, Taito-ku, Tokyo
1,130
1,032
0.2
1,200
E
iriyaguchiinterests
Trust
Hotel MyStays
1-9-30 Nishi-Shinsaibashi,
beneficiary
D38
3,160
2,903
0.6
2,080
B
Shinsaibashi
Chuo-ku, Osaka-shi, Osakainterests
Trust
3-13-13 Kurosaki, Yahatanishi-ku,
beneficiary
D39 Comfort Hotel Kurosaki
1,148
971
0.2
1,200
E
Kitakyusyu-shi, Fukuoka
interests
Trust
2-18-14 Omotecho, Maebashi-shi,
beneficiary
D40 Comfort Hotel Maebashi
1,128
901
0.2
1,100
E
Gunma
interests
Trust
Comfort Hotel TsubamebeneficiaryD41
2-115 Sugoro, Sanjo-shi, Niigata
1,010
870
0.2
1,060
E
Sanjo
interests
Trust
3-4 Ohdori-Nishi, Kitami-shi,
beneficiary
D42 Comfort Hotel Kitami
851
715
0.2
883
E
Hokkaido
interests
Trust
Hotel MyStays Gotanda 2-6-8 Nishi-Gotanda,
beneficiaryD43
26,52326,095
4.8
24,500C
Station (Note 9)
Shinagawa-ku, Tokyo
interests
Trust
1-10 Kaidoue, Oaza-Takakuhei,
Hotel Epinard Nasu
beneficiaryD44
Nasu-machi, Nasu-gun, Tochigi
21,002
18,057
3.8
23,400C(Note 10)interests(and 59 other parcels)
Trust
Hotel MyStays Fukuoka 3-5-7 Tenjin, Chuo-ku, Fukuokabeneficiary
D45
8,059
7,565
1.5
8,360
C
Tenjinshi, Fukuoka
interests
Trust
Hotel MyStays
1-18-14 Hamamatsucho, Minatobeneficiary
D46
7,959
7,690
1.5
6,300
C
Hamamatsucho
ku, Tokyo
interests
Trust
Hotel MyStays Premier 2-13-5 Hirooka, Kanazawa-shi,
beneficiary
D47
13,761
12,146
2.5
12,700C
Kanazawa
Ishikawa
interests
Trust
Takamatsu Tokyu REI
9-9 Hyogomachi, Takamatsu-shi,
beneficiary
D48
2,139
2,083
0.4
1,720
E
Hotel
Kagawainterests
Trust
Hotel MyStays Premier 1-8-5 Hamamatsucho, Minato-ku,
beneficiary
D49
8,000
7,882
1.5
10,100B
HamamatsuchoTokyo
interests

54

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)

Property
number(Note 1)Name of property

Location(Note 2)

D50

Hotel MyStays Shin
6-2-19 Nishinakashima,
Osaka Conference Center Yodogawa-ku, Osaka-shi, Osaka

D51

Hotel MyStays PremierOmori

6-19-3 Minami Oi, Shinagawa-ku,
Tokyo

D52

Kamenoi Hotel Beppu

5-17 Chuo cho, Beppu-shi, Oita

D53

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

D54

Hotel MyStays
Yokohama Kannai

5-65, Onoe-cho, Naka-ku,
Yokohama-shi, Kanagawa and3 other lots

D55

Art Hotel Joetsu

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

D56

Art Hotel Hirosaki City

1-1-2, 1-1-6, 1-1-7, 1-2-1, Omachi,
Hirosaki-shi, Aomori

D57

Hotel MyStays Oita

1-32, Niagemachi Oita-shi, Oita

D58

Hotel MyStays Gotanda

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

D59

Hotel MyStays
Tachikawa

1-8-14, Nishiki-cho Tachikawashi, Tokyo

D60

Hotel MyStays Premier
Akasaka

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

D61

Hotel MyStays Premier
Sapporo Park

2-2-10, Minamikujonishi Chuoku, Sapporo-shi, Hokkaido

D62

Hotel MyStays Ueno
East

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

D63

Hotel MyStays Midosuji 3-2-10, Honmachi, Chuo-ku,
HonmachiOsaka-shi, Osaka

D64

Hotel MyStays Sapporo
Aspen

5-1 Nishi 4-chome, Kita 8-jo, Kitaku, Sapporo-shi, Hokkaido, andseven other lots

D65

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

D66

Hotel MyStays Fuji
Onsen Resort

2654 Arakura Deguchi,
Fujiyoshida-shi, Yamanashi, and15 other lots

D67

Hotel Sonia Otaru

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

D68

Hotel MyStays
Kanazawa Castle

10-17 Konohana-machi,
Kanazawa-shi, Ishikawa

D69

Art Hotel Niigata Station

1-1 Sasaguchi, Chuo-ku, Niigatashi, Niigata

D70

Hotel MyStays Nagoya
Nishiki

3-8-21 Nishiki, Naka-ku, Nagoyashi, Aichi

Appraisal
Balancevalue at theAcquisition
sheet
Investment
end of theLegal form
price
carrying percentage
Appraiser
periodof asset (JPY million) value(%)(Note 7)(JPY
(Note 3)(JPY
(Note 4)
million)million)(Note 5)Trust
beneficiary
13,06812,756
2.4
13,400D
interests
Trustbeneficiary
9,781
9,697
1.8
10,300D
interests
Trustbeneficiary
8,870
7,527
1.6
9,810
D
interests
Trustbeneficiary
7,880
7,336
1.4
8,820
D
interests
Trustbeneficiary
5,326
4,996
1.0
5,710
D
interests
Trustbeneficiary
2,772
2,544
0.5
2,660
D
interests
Trustbeneficiary
2,723
2,561
0.5
2,500
D
interests
Trustbeneficiary
1,604
1,402
0.3
1,680
D
interests
Trustbeneficiary
4,068
4,028
0.7
4,310
D
interests
Trustbeneficiary
3,257
3,158
0.6
3,420
E
interests
Trustbeneficiary
20,691
20,031
3.8
23,400B
interests
Trustbeneficiary
16,731
15,7603.0
16,300D
interests
Trustbeneficiary
5,286
5,096
1.0
5,460
D
interests
Trustbeneficiary
5,039
4,718
0.9
3,130
B
interests
Trustbeneficiary
15,543
15,1282.8
15,400D
interests
Trustbeneficiary
9,731
9,374
1.8
9,670
B
interests
Trustbeneficiary
9,405
8,456
1.7
10,700B
interests
Trustbeneficiary
5,930
5,440
1.1
6,420
D
interests
Trustbeneficiary
5,682
5,568
1.0
5,750
D
interests
Trustbeneficiary
5,524
5,137
1.0
5,780
D
interests
Trustbeneficiary
5,197
5,006
0.9
5,240
C
interests

55

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)
Appraisal
Balancevalue at theAcquisition
sheet
Investment
Propertyend of the
Location
Legal form
price
carrying percentage
Appraiser
numberName of property
period(Note 2)of asset (JPY million) value(%)(Note 7)(Note 1)(JPY
(Note 3)(JPY
(Note 4)
million)million)(Note 5)Trust
1-4-16 Ironai, Otaru-shi,
beneficiary
D71 Hotel Nord Otaru
4,296
4,145
0.8
4,380
D
Hokkaido
interests
Trust
Hotel MyStays
2-7 Yamanokuchi-cho,beneficiary
D72
3,445
3,290
0.6
3,550
E
Kagoshima Tenmonkan Kagoshima-shi, Kagoshima
interests
Trust
6-29-2 7-jo-dori, Asahikawa-shi,
beneficiary
D73 Art Hotel Asahikawa
3,197
2,817
0.6
3,340
D
Hokkaido
interests
Trust
Hotel MyStays
1-10-10 Otemachi, Matsuyamabeneficiary
D74
3,098
2,792
0.6
3,210
E
Matsuyamashi, Ehime
interests
Trust
1-6 Nishi 5-Chome, Minami 7-jo,
Hotel MyStays Sapporo
D75
Chuo-ku, Sapporo-shi, Hokkaido, beneficiary
3,059
2,944
0.6
2,980
C
Susukino
interests
and one other lot
Trust
Hotel MyStays Sapporo 1-20 Nishi 1-chome, Minami 14-jo,beneficiary
D76
2,118
1,999
0.4
2,010
C
Nakajima Park
Chuo-ku, Sapporo-shi, Hokkaido
interests
Trust
Hotel MyStays Sapporo 4-3 Nishi 1-chome, Minami 11-jo,beneficiary
D77
1,584
1,560
0.3
1,580
D
Nakajima Park Annex
Chuo-ku, Sapporo-shi, Hokkaido
interests
Trust
2-72-2 Hanasaki-cho, Naka-ku,
beneficiary
D78 Flexstay Inn Sakuragicho Yokohama-shi, Kanagawa, and
1,425
1,378
0.3
1,490
E
interests
four other lot
Trust
MyCUBE by MYSTAYS
beneficiary
D79
2-6-7 Kuramae, Taito-ku, Tokyo
1,287
1,253
0.2
1,270
E
Asakusa Kuramaeinterests
Hotel MyStays
Trust
1-20 Gofuku-machi, Kagoshimabeneficiary
D80 Kagoshima Tenmonkan
1,168
1,135
0.2
1,240
E
shi, Kagoshima
Annex
interests
Trust
11 Minami 5-chome, Nishi 3-jo,beneficiary
D81 Hotel MyStays Nayoro Nayoro-shi, Hokkaido, and one
957
840
0.2
972
C
interests
other lot
Trust
Hotel MyStays Premier 40 Yokomine Oyama, Narita-shi,
beneficiary
D82
10,5939,727
1.9
10,500D
NaritaChibainterests
Trust
D83 Art Hotel Morioka
3-3-18 Odori, Morioka-shi, Iwate beneficiary
5,643
5,204
1.0
5,520
C
interests
Trust
Fusaki Beach Resort
1625-6 Arakawa Fusaki, IshigakibeneficiaryD84
40,29340,122
7.3
40,900B
Hotel & Villas
shi, Okinawa, and sixty other lots
interests
4035-187 Minamiyama Kuridaira
Trust
Tateshina Grand Hotel yori Mimuro Oogaya made,beneficiary
D85
8,365
8,472
1.5
8,600
D
Takinoyu
Kitayama, Chino-shi, Nagano,interests
and sixteen other lots
Trust
9-16, Honmachi, Kita-ku,
beneficiary
D86 Hotel MyStays Okayama
2,613
2,674
0.5
2,680
B
Okayama-shi, Okayama
interests
Trust
Hotel MyStays Aomori 1-8-6 Shinmachi, Aomori-shi,
beneficiary
D87
2,445
2,420
0.4
2,470
C
StationAomoriinterests
Trust
2-7-13 Minamicho, Chuo Ward,beneficiary
D88 Hotel MyStays Soga
2,039
2,060
0.4
2,110
D
Chiba-shi, Chibainterests
Trust
82-117 Shimotakano, Tazawako
Tazawako Lake Resort &D89
Obonai, Senboku-shi, Akita, and beneficiary
1,475
1,511
0.3
1,490
E
Onsen
interests
forty-one other lots
67,19930,061The(USD
Westin Grand Cayman(USD30620 Seven Mile Beach Road,
473,800
LeaseholdD200 Seven Mile Beach
27,593
5.5
FGrand Cayman, Cayman Islands
272,171
thousand)Resort & SPA(Note 11)thousand)(Note 12)56

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)

Property
number(Note 1)Name of property

Location(Note 2)

D201

Sunshine Suites Resort

1465 Esterley Tibbetts Highway,
Grand Cayman, Cayman Islands

Appraisal
Balancevalue at theAcquisition
sheet
Investment
end of theLegal form
price
carrying percentage
Appraiser
periodof asset (JPY million) value(%)(Note 7)(JPY
(Note 3)(JPY
(Note 4)
million)million)(Note 5)
10,495
The
5,842
(USD
(74,000
Leasehold (USD 52,898
5,221
1.1
F
thousand)(Note 11)thousand)(Note 12)Subtotal (91 properties)

490,015

460,103

89.3

578,432-

Total (133 properties)

530,800

495,78296.7

629,041-

17,845

17,856

3.3- (Note 5)

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

17,845

17,856

3.3--

Total (134 properties)

548,646

513,638

100.0

-

-

Sheraton Grande Tokyo
Bay Hotel (preferred
equity interest)-

Preferredequityinterest
issued by
specialpurposecompany(Note 13)-

(Note 1)

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

(Note 2)

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

(Note 3)

“Acquisition price” is the purchase price indicated in the real estate or trust beneficiary purchase agreement except for Sheraton
Grande Tokyo Bay Hotel (preferred equity interest), Westin Grand Cayman Seven Mile Beach Resort & SPA and Sunshine Suites
Resort. For Sheraton Grande Tokyo Bay Hotel (preferred equity interest), “Acquisition price” indicates the amount invested by
INV for the preferred equity interest, excluding investment in the specified equity interests in the Kingdom Tokutei Mokuteki
Kaisha and the acquisition price of the equity interest held by the employees in a G.K., which is a master lease company. For
Westin Grand Cayman Seven Mile Beach Resort & SPA and Sunshine Suites Resort, the book value of the Leasehold of each of the
Cayman Hotels is stated by the Cayman SPC as of May 9, 2019 (Cayman Islands local time; May 10, 2019 in Japan local time),
which is the date when INV succeeded the Leasehold from the Cayman SPC as dividend in kind in line with the agreed terminationof the TK agreement. The amounts in USD are converted into JPY as shown. Such price excludes consumption tax and othertaxes, and has been rounded down to the nearest million yen.

(Note 4)

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

(Note 5)

“Appraisal value at the end of the period” is the value appraised or determined based on research by the real estate appraiser
as of the end of the fiscal period in accordance with the Articles of Incorporation of INV and the regulations of The Investment
Trust Association, Japan. As to appraisal of Westin Grand Cayman Seven Mile Beach Resort & SPA and Sunshine Suites Resort,the local appraiser verification method (Note 6) is adopted. The appraisal value for Sunshine Suites Resort includes the unused
land adjacent to the hotel. Appraisal is entrusted to those described in (Note 7) below. For Sheraton Grande Tokyo Bay Hotel(preferred equity interest), there is no appraisal value at the end of the period due to it being preferred equity interest. An
appraisal value for the underlying asset as of the closing date of the Reporting Period is as follows.
Name of property

Appraisal value

Sheraton Grande Tokyo Bay Hotel(Note 6)

JPY 102,000 million

Appraiser(Note 7)
D

Under the “local appraiser verification method,” a real estate appraiser licensed in Japan determines appraisal value based on
the understanding and analyses of basic data and information necessary for real estate appraisal, including appraisal methods
employed by local appraisers, and transaction examples and trends in local markets that are used for real estate appraisal, andby verifying the validity of decisions made in appraisal reports and appropriateness of appraisal value prepared by local
appraisers. INV appoints CBRE, Inc., a professional appraiser licensed and certified in the Cayman Islands, as a local appraiser
to engage in appraisal of the Underlying Asset and prepare a local appraisal report. INV then engages CBRE K.K., a company
appointed as a real estate appraiser in Japan, to verify the local appraisal report and then obtains a report on verification ofappraisal performed by local appraiser.

57

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)(Note 7) “Appraiser” is shown in code in the table above.

The code used to represent the appraisers is as follows:

Appraiser
A: Assets Research and Development Inc.
B: Japan Real Estate Institute
C: JLL Morii Valuation & Advisory K.K.
D: The Tanizawa Sogo Appraisal Co., Ltd.
E: Daiwa Real Estate Appraisal Co., Ltd.
F: CBRE K.K.
As to the appraisal of Westin Grand Cayman Seven Mile Beach Resort & SPA and Sunshine Suites Resort, the local appraiser
verification method is adopted and CBRE K.K. has entrusted such appraisal to CBRE, Inc. The appraisal value for Sunshine
Suites Resort includes the acquisition price of the unused land adjacent to the hotel.
(Note 8)

These trust beneficiary interests were integrated into three groups with other trust beneficiary interests when INV procured funds
through debt financing backed by trust assets in July 2011. The grouping of trust beneficiary interests at the end of the Reporting
Period is as follows:
Group 1
Nisshin Palacestage Daitabashi, Growth Maison Shin-Yokohama, Belle Face Ueno-Okachimachi, Growth Maison Yoga,
Shibuya-Honmachi Mansion, and Foros Nakamurabashi
Group 2
College Square Machida, Belair Meguro, and Wacore Tsunashima I
Group 3
Suncrest Shakujii-Koen, Grand Rire Kameido, Acseeds Tower Kawaguchi-Namiki, Growth Maison Kaijin, and College Square
Machiya(Note 9)Acquisition price includes the floor expansion portion. Appraisal value at the end of the period indicates appraisal value
calculated deeming the owned portion and the floor expansion portion as one.

(Note 10) Acquisition price includes the adjacent land portion. Appraisal value at the end of the period indicates appraisal value calculated
deeming the owned portion and the adjacent land portion as one.
(Note 11) The leasehold interests are the rights equivalent to long-term real estate leasehold rights for buildings and land under the laws of
the Cayman Islands (Term: 99 years; annual lease payment: USD 1 or KYD 1). INV implemented an investment structure change
regarding “Westin Grand Cayman Seven Mile Beach Resort & Spa” and “Sunshine Suites Resort” on May 9, 2019 (Cayman Islands
local time), a change from making investments based on the TK agreement to directly owning the movable assets such as leasehold
and FF&E of the Cayman Hotels (the Leasehold, etc.), which were the underlying assets of the TK.
(Note 12) Appraisal value at the end of the period is converted into JPY using the exchange rate of USD 1 = JPY 141.83, which is the exchange
rate on the closing date of the Reporting Period (December 31, 2023).
(Note 13) Preferred equity interest issued by special purpose company refers to 178,458 units of preferred equity interest issued by Kingdom
Special Purpose Company (equivalent to 49.0% of preferred equity interest issued and outstanding after the issuance of the said
preferred equity interest), with the Sheraton Grande Tokyo Bay Hotel as an underlying asset, and is recorded as one property.

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Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)b

Capital expenditures for assets under management(a) Schedule for capital expenditures
The schedule for the principal capital expenditures for property maintenance construction, etc., as of the endof the Reporting Period for the real estate assets is as follows.
Estimated Cost (JPY thousand)Name of Property

Location

PurposePayment for
Advance
Total the Reporting
Payments
PeriodRenewal of air
conditioning
facility of entire
building

From January 2024
355,000
To June 2024--

Grand Cayman,
Renewal of guest
Caymanroom furniture
Islands

From January 2024
70,593
To June 2024--

From January 2024
66,328To June 2024--

From January 2024
64,000To June 2024--

From January 2024
60,000To June 2024--

APA Hotel
Yokohama-shi,
D21
Yokohama-Kannai Kanagawa
Westin Grand
Cayman Seven
D200
Mile Beach Resort& SPA
Westin Grand
Cayman Seven
D200
Mile Beach Resort& SPA

Scheduled Time of
Implementation

Renewal of air
Grand Cayman,
conditioning
Caymanfacility of guest
Islands
rooms
Renewal of gas
MyStays Shinheat pump facility
Urayasu-shi,(1F and 2F) and
D04 Urayasu
Chiba
Conference Center
total heatexchangers
Renewal of gas
Hotel MyStays
Sapporo-shi,
D53
heat pump facility
Sapporo Station
Hokkaido(two floors)(b) Capital expenditures for the Reporting Period
The principal construction work constituting capital expenditures for the real estate assets for the Reporting
Period is as follows. Capital expenditures for the Reporting Period totaled JPY 1,796,357 thousand, andtogether with JPY 29,932 thousand in repair costs included in this fiscal period’s expenses, construction
work totaling JPY 1,826,290 thousand was implemented.
Name of property

Location

PurposeTime ofimplementation

Payment(JPY thousand)Hotel MyStays
D22 HakodateGoryokaku

Hakodate-shi,
Hokkaido

Renovation of
exterior wall

From July 2023
To December 2023

85,000Art Hotel
Hirosaki City

Hirosaki-shi,
AomoriRenovation of
exterior wall

From July 2023
To December 2023

59,660

D83 Art Hotel Morioka

Morioka-shi,
Iwate

Renovation ofmulti-story car
parking

From July 2023
To December 2023

56,500A38 Route Tachikawa

Tachikawa-shi, Renovation ofTokyo
exterior wall

From July 2023
To December 2023

53,642

Renewal of air
conditioning /water
From July 2023
heating facility and
To December 2023
energy saving
facility

53,320

D56

D64

Hotel MyStays
Sapporo Aspen

Sapporo-shi,
Hokkaido

Other construction

1,488,234
Total

(3)

1,796,357

Tenant Summary59

Financial Summary for the December 2023 Fiscal Period(from July 1, 2023 to December 31, 2023)

a Summary of lease conditions by property
Disclosure is omitted because the information is described in the presentation material, “December 2023
Fiscal Period Results (July 1, 2023 to December 31, 2023)” separately announced on February 26, 2024.
b Occupancy trend
Disclosure is omitted because the information is described in the presentation material, “December 2023
Fiscal Period Results (July 1, 2023 to December 31, 2023)” separately announced on February 26, 2024.

60